EUR/JPY remains depressed near 165.70, bulls have the upper hand while above 200-day SMA

• EUR/JPY meets with some supply on Thursday as JPY benefits from intervention fears.
• The BoJ rate hike uncertainty and the risk-on mood cap gains for the safe-haven JPY.
• Bets for less aggressive ECB rate cuts lend some support to the Euro and the cross.

The EUR/JPY cross struggles to capitalize on the previous day's goodish bounce from levels just below the 165.00 psychological mark and attracts fresh sellers on Thursday. Spot prices remain depressed through the first half of the European session and currently trade around the 165.70-165.65 area, though lack follow-through and remain confined in a familiar range held over the past week or so. 

Wednesday's surge in the USD/JPY pair, triggered by Donald Trump's victory in the US election, prompted verbal intervention by Japanese authorities. This leads to some unwinding of the bearish positions around the Japanese Yen (JPY), which, in turn, is seen exerting downward pressure on the EUR/JPY cross. That said, the uncertainty over the Bank of Japan's (BoJ) rate-hike plan keeps a lid on any meaningful appreciating move for the JPY.

Investors seem convinced that Japan's political landscape could make it difficult for the BoJ to tighten its monetary policy further. Moreover, government data released this Thursday showed that Japan's inflation-adjusted wages fell for the second straight month in September, raising doubts about how soon the BoJ could raise rates again. This, along with the risk-on mood, caps the upside for the safe-haven JPY and offers support to the EUR/JPY cross. 

The shared currency, on the other hand, draws support from bets for a less dovish European Central Bank (ECB). In fact, data released last week showed that inflation in the Eurozone rose to 2% in October. This, along with the better-than-expected GDP growth figures from the Eurozone's largest economies, suggests that the ECB will stick to a 25 basis points (bps) rate cut at the December meeting and helps limit the downside for the EUR/JPY cross.

Even from a technical perspective, the range-bound price action might still be categorized as a bullish consolidation phase on the back of the recent breakout above the very important 200-day Simple Moving Average (SMA). This, in turn, suggests that the path of least resistance for the EUR/JPY cross is to the upside. Hence, any subsequent decline might still be seen as a buying opportunity and is more likely to remain cushioned.