Holds below 161.00 ahead of ECB rate decision

• EUR/JPY rebounds to 160.75 ahead of the ECB rate decision. 
• The cross maintains a bullish outlook above the key Exponential Moving Averages (EMA). 
• The immediate resistance level is seen at 161.40; 160.30 acts as an initial support level for the cross. 

The EUR/JPY cross recovers some lost ground near 160.75 during the early European session on Thursday. The weaker-than-expected German and Eurozone PMI data for January weigh on the Euro (EUR) and act as a headwind for EUR/JPY. Investors await the European Central Bank (ECB) monetary policy meeting on Thursday, with no change in rate expected. 

According to the four-hour chart, the bullish potential of EUR/JPY remains intact as the cross holds above the 100-period Exponential Moving Averages (EMA). It’s worth noting that the Relative Strength Index (RSI) stands below the 50-midline, indicating that further decline cannot be ruled out in the near term. 

The upper boundary of the Bollinger Band at 161.40 acts as an immediate resistance level for the cross. The additional upside filter will emerge at a high of January 23 at 161.70, followed by a high of January 19 at 161.87.

On the other hand, the lower limit of the Bollinger Band at 160.30 acts as an initial support level for EUR/JPY. The crucial contention level is seen near a low of January 24 and a psychological mark at 160.00. A breach of this level will see a drop to the 100-period EMA at 159.72. 

EUR/JPY four-hour chart