EUR/JPY extends its winning streak for the fourth successive session, reached fresh all-time high of 181.73 and currently trading around 181.40 during the early European hours on Thursday. The currency cross moves upwards within the ascending channel pattern, suggesting a persistent bullish bias.

Additionally, the 14-day Relative Strength Index (RSI) has moved above the 70 mark, indicating overbought conditions and a likelihood of a near-term downward correction. The EUR/JPY cross suggests a stronger short-term momentum, as it remains above the nine-day Exponential Moving Average (EMA).

On the upside, the initial resistance lies at the psychological level of 182.00, followed by the upper boundary of the ascending channel around 182.20. A break above this confluence area could reinforce the bullish bias and lead the EUR/JPY cross to approach the crucial level of 183.00.

The initial support lies at the lower boundary of the ascending channel around 180.20, followed by the nine-day EMA at 179.85. Further declines below this confluence support zone would weaken the bullish bias and put downward pressure on the EUR/JPY cross to navigate the area around the 50-day EMA at 176.65.

From a macro perspective, the Japanese Yen struggles against its peers due to the potential for Japan’s Prime Minister Sanae Takaichi to unveil a stimulus package exceeding JPY 20 trillion.

The upside of the EUR/JPY cross could be restrained as the JPY may receive support on emergence of hawkish sentiment surrounding the Bank of Japan (BoJ) policy outlook. A Reuters poll indicated that the BoJ appears poised to raise interest rates to 0.75% from 0.50% at its December 18–19 meeting.

Additionally, BoJ board member Junko Koeda noted that she believes the central bank must continue to raise the policy interest rate and adjust the degree of monetary accommodation in accordance with improvement in economic activity and prices.” Koeda emphasized that ongoing economic and price trends warrant further policy adjustment.