EUR/JPY Price Forecast: The next bullish target to watch is above 162.50

• EUR/JPY drifts higher to near 162.00 in Wednesday’s early European session.
• The cross maintains a negative outlook below the 100-period EMA, with a bearish RSI indicator. 
• The potential resistance level emerges at 162.70; the initial downside target to watch is 161.17.

The EUR/JPY cross holds positive ground around 162.00 during the early European session on Thursday. A record of Japan’s trade deficit data weighs on the Japanese Yen (JPY) and creates a tailwind for EUR/JPY. Japan’s Merchandise Trade Balance fell into a deficit of ¥621.84 billion after maintaining a surplus in June as imports climbed faster than expected.

Later on Thursday, traders will focus on the preliminary Purchasing Managers’ Index (PMI) for August from Germany and the Eurozone. On the Japanese docket, the National Consumer Price Index (CPI) for July and the Bank of Japan (BoJ) Governor Ueda's speech will be closely watched. 

EUR/JPY keeps the bearish vibe unchanged on the 4-hour chart as the cross is currently below the key 100-period Exponential Moving Averages (EMA). Additionally, the Relative Strength Index (RSI) stands below the midline near 48.00, suggesting that there could still be room for further downward movement in the near term. 

The 100-period EMA at 162.70 acts as an immediate resistance level for the cross. Extended gains could expose 162.85, the upper boundary of the Bollinger Band. The additional upside filter to watch is 163.75, the high of August 16. 

On the flip side, the first downside target emerges at 161.17, the lower limit of the Bollinger Band. A breach of this level could pave the way to 160.42, the low of August 19. The next contention level is located at 159.91, the low of August 9.   

EUR/JPY 4-hour chart