• EUR/JPY gains ground near 155.61 on Wednesday.
• The cross maintains a bearish outlook below the key EMA; the RSI indicator stands below the 50 midline.
• The first upside barrier will emerge at 156.38; 155.05 acts as an initial support level for EUR/JPY.

The EUR/JPY cross recovers some lost ground above the mid-155.00s during the early European session on Wednesday. The upside of the cross might be capped as investors anticipate that the Bank of Japan (BoJ) will abandon its ultra-loose monetary policy settings by the first half of 2024. At press time, EUR/JPY is trading at 155.61, gaining 0.16% on the day.

Technically, the bearish outlook of EUR/JPY remains intact as the cross holds below the 50- and 100-hour Exponential Moving Averages (EMAs) on the four-hour chart. The downward momentum is supported by the 14-day Relative Strength Index (RSI) which stands below 50 midline, indicating further downside looks favorable.

The first upside barrier will emerge near the 50-hour EMA at 156.38. Any follow-through buying above the latter will see a rally to the key resistance level at the 156.90–157.00 zone, portraying the confluence of the 50-hour EMA, the upper boundary of the Bollinger Band, and a psychological round mark. Further north, the next hurdle is seen at a high of December 20 at 157.73, en route to a high of December 27 at 158.38.

On the other hand, the lower limit of the Bollinger Band at 155.05 acts as an initial support level for EUR/JPY. The next contention is located near a low of December 15 at 154.40. The additional downside filter to watch is a low of December 14 at 153.85, followed by a low of December 7 at 153.16