EUR/JPY Price Analysis: Hits fresh 15-year peak post-BoJ, bulls turn cautious amid overbought RSI

• EUR/JPY regains positive traction on Friday and jumps to a fresh 15-year peak.
• The BoJ’s decision to stand pat weigh on the JPY and provides a goodish boost.
• The ECB’s hawkish outlook remains supportive of the move and favours bulls.

The EUR/JPY cross attracts some dip-buying near the 153.00 mark during the Asian session on Friday and hits a fresh 15-year top in reaction to the Bank of Japan (BoJ) policy decision. The cross is currently placed just below the 154.00 round-figure mark and seems poised to build on its recent upward trajectory witnessed over the past month or so.

The Japanese Yen (JPY) weakens across the board after the BoJ, as was widely expected, stuck to its dovish stance and left its ultra-loose policy settings unchanged at the end of the June monetary policy meeting this Friday. This marks a big divergent in comparison to the European Central Bank's (ECB) hawkish 25 bps lift-off on Thursday, which continues to underpin the shared currency and remains supportive of the bid tone surrounding the EUR/JPY cross.

From a technical perspective, this week's sustained strength beyond the 151.00 horizontal barrier was seen as a key trigger for bullish traders. The subsequent move up validates the breakout, though the extremely overbought Relative Strength Index (RSI) on the daily chart makes it prudent to wait for some near-term consolidation or a modest pullback before positioning for any further move up. Nevertheless, the EUR/JPY cross remains on track to register strong weekly gains.

In the meantime, the 153.55 region now seems to protect the immediate downside ahead of the daily swing low, around the 153.00 mark. Some follow-through selling below the 152.80 zone might prompt some long-unwinding trade and accelerate the corrective decline towards the 152.00 round figure. Any further downfall, however, is likely to attract fresh buyers and remain cushioned near the previous YTD peak, around the 151.60 region touched in May.

EUR/JPY daily chart

Key levels to watch