• EUR/JPY trades near its record high of 180.29, hovering around the ascending channel’s upper resistance.
• The 14-day Relative Strength Index holds slightly below the 70 level, strengthening the bullish bias.
• A more hawkish BoJ stance would reinforce the technical expectation of a downward correction.

EUR/JPY moves little after two days of gains, maintaining its position around 180.20, near a fresh all-time high of 180.29, during the early European hours on Wednesday. The currency cross remains close to the upper boundary of an ascending channel pattern, suggesting that bullish momentum may be losing steam and a pullback could be on the horizon.

Additionally, the 14-day Relative Strength Index (RSI) is positioned slightly below the 70 mark, reinforcing the bullish bias. However, a move above 70 would indicate overbought conditions and raise the 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, further advances above the record high of 180.29, aligned with the ascending channel’s upper boundary, would lead the EUR/JPY cross to approach the psychological level of 181.00.

The initial support lies at the crucial level of 180.00, followed by the nine-day EMA at 179.29. Further declines below the latter would dampen the short-term price momentum and prompt the currency cross to test the lower boundary of the ascending channel around 177.40, followed by the 50-day EMA at 176.43.

From a macro perspective, any clear hawkish stance from the Bank of Japan (BoJ) would strengthen the technical expectation of a downward correction, particularly after the EUR/JPY cross enters overbought territory.

The BoJ Governor Kazuo Ueda told Prime Minister Sanae Takaichi that the central bank is in the process of gradually dialing back its easing support for the economy, signaling his unshaken intention to raise interest rates carefully. Ueda added that the BOJ will make appropriate policy decisions based on data.

(The story was corrected on November 19 at 08:00 GMT to say in the fourth paragraph, "the currency cross to test the lower boundary of the ascending channel, and not lower resistance.")