EUR/JPY Price Analysis: BoJ’s dovish remarks boost the cross above 161.00, bearish outlook remains intact

• EUR/JPY holds positive ground near 161.10 in Wednesday’s early European session, up 2.12% on the day. 
• The bearish picture of the cross remains intact below the 100-period EMA. 
• The first upside barrier emerges at 162.18; the initial support level is located at 157.30. 

The EUR/JPY cross gathers strength near 161.10, snapping the seven-day losing streak during the early European session on Wednesday. Amidst the volatile session, the Japanese Yen (JPY) loses momentum after the dovish comments from the Japanese official. On Wednesday, Bank of Japan (BoJ) Deputy Governor Shinichi Uchida said that the central bank will not hike rates when markets are unstable. 

According to the 4-hour chart, the bearish outlook of EUR/JPY prevails as the cross remains below the key 100-period Exponential Moving Averages (EMA). Nonetheless, the Relative Strength Index (RSI) holds above the midline, near 53.80, suggesting that further upside in the near term looks favorable. 

In the bullish event, the first upside target emerges near the upper boundary of the Bollinger Band at 162.18. The next potential resistance level is located in the 162.90-163.00 zone, portraying the confluence of a psychological level and a high of August 1. Extended gains will see a rally to the 100-period EMA at 165.07. 

On the downside, the initial support level for EUR/JPY is seen at 157.30, a low of August 6. The additional downside filter to watch is the lower limit of the Bollinger Band of 156.12, followed by a low of August 5 at 154.41.  

EUR/JPY 4-hour chart