The EUR/JPY cross weakens near 172.45 on Wednesday during the early European session. The cross edges lower as traders turn cautious ahead of the release of the Eurozone Harmonized Index of Consumer Prices (HICP) for June. The attention will shift to the European Central Bank (ECB) interest rate decision on Thursday, with no change in rates expected.
According to the 4-hour chart, the bearish outlook of EUR/JPY remains intact as the cross holds below the key 100-period Exponential Moving Averages (EMA). The cross could resume its upside if it can break above the 100-period EMA at 172.75. Meanwhile, the Relative Strength Index (RSI) stands in the bearish zone around 42.15, suggesting that the path of least resistance is to the downside.
The first upside barrier for the cross will emerge at 172.75, the 100-period EMA. Further north, the next hurdle is seen at 173.21, the upper boundary of the Bollinger Band. Extended gains will see a rally to 173.80, a low of July 4.
On the downside, the initial support level for the cross is located at 171.82, the lower limit of the Bollinger Band. The additional downside filter to watch is 170.85, a low of June 26. The crucial contention level will emerge at the 170.00 psychological level.
EUR/JPY 4-hour chart
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