EUR/JPY is steady on Wednesday after two consecutive days of gains, trading around 180.20 during early European hours. The cross remains just below its record high of 180.29 and is hovering near the upper boundary of its ascending channel — a sign that bullish momentum may be losing traction and that a corrective pullback could be approaching.
Technical signals show bullish bias but warn of overbought risk
The 14-day Relative Strength Index (RSI) is sitting just below the 70 threshold, maintaining a bullish outlook. A sustained move above 70, however, would signal overbought conditions and increase the likelihood of a near-term retracement.
EUR/JPY also remains above the nine-day Exponential Moving Average (EMA), reinforcing short-term upside momentum.
Key levels to watch
A breakout above the all-time high at 180.29 — in line with the ascending channel’s upper boundary — would pave the way for a move toward the psychological 181.00 handle.
Initial support is seen at 180.00, followed by the nine-day EMA at 179.29. A drop below this area would weaken short-term momentum and expose the lower boundary of the ascending channel near 177.40, with the 50-day EMA at 176.43 acting as a deeper support level.
BoJ stance could trigger a correction
From a macro perspective, any hawkish shift by the Bank of Japan (BoJ) could add weight to the technical case for a pullback, especially if the pair moves into overbought territory.
BoJ Governor Kazuo Ueda told Prime Minister Sanae Takaichi that the central bank is gradually scaling back its easing measures, reaffirming his intention to proceed carefully with interest-rate increases. Ueda added that the BoJ will continue to base policy decisions on incoming economic data.
