EUR/JPY Price Analysis: Advances above the 156.00 area following Japanese CPI

EUR/JPY gains traction above the key 156.00 area during the early Asian session on Friday. According to the four-hour chart, EUR/JPY holds above the 100- and 200-hour Exponential Moving Averages (EMA), which means further upside looks favorable.

The Japan Statistics Bureau revealed that June's National Consumer Price Index (CPI) inflation rose from 3.2% to 3.3% YoY, versus 3.5% expected. Japanese policymakers are likely to maintain an ultra-easy monetary policy next week. This, in turn, led to the weakening of the Japanese Yen against its major rivals due to monetary policy divergences.

On the other side, concern about the economic slowdown in the Eurozone, which could push back a hawkish stance from the European Central Bank (ECB), might exert downside pressure on the Euro.

Therefore, the cross could meet the immediate resistance level of 156.90 (High of June 22). The 158.00 area appears to be a tough nut to crack for EUR/JPY. The mentioned level represents a psychological round mark and a year-to-date (YTD) high. Any meaningful follow-through buying will see a rally to the next round level hurdles at 159.00 and 160.00. 

On the flip side, any extended weakness below 155.00 will challenge the initial support level of 154.60, representing the 200-hour EMA. The additional downside filter to watch is 154.25 (Low of June 20) en route to 153.40 (Low of June 12). Further south, the cross will see a drop to 152.70 (Low of June 15).

The Relative Strength Index (RSI) stands below 50, within the bearish territory, suggesting that sellers are likely to retain control in the near term.

EUR/JPY four-hour chart