EUR/JPY Price Forecast: Retains bullish bias near 172.50, overbought RSI warrants caution for bulls

• EUR/JPY strengthens to around 172.45 in Tuesday's early Asian session. 
• The positive bias of the cross prevails above the 100-day EMA, but the overbought RSI condition might cap its upside. 
• The immediate resistance level is seen at 173.20; the initial support level is located at 170.81.

The EUR/JPY cross trades in positive territory near 172.45 during the Asian trading hours on Tuesday. The rising expectation that the Bank of Japan (BoJ) would keep interest rates low for longer than it wants could weigh on the Japanese Yen (JPY) against the Euro (EUR). The release of ZEW Survey from Germany will be released later on Tuesday. 

Technically, EUR/JPY keeps the bullish vibe on the daily chart, with the price holding above the key 100-day Exponential Moving Average (EMA). However, the 14-day Relative Strength Index (RSI) stands above the midline near 73.10, indicating the overbought RSI condition. This suggests that further consolidation or temporary sell-off cannot be ruled out before positioning for any near-term EUR/JPY appreciation.

The first upside barrier for the cross emerges at 173.20, representing the upper boundary of the Bollinger Band. Extended gains could see a rally to 174.52, the high of July 3, 2024. The additional upside filter to watch is 175.43,  the high of July 11, 2024. 

On the other hand, the initial support level for the cross is located at 170.81, the low of July 11. A breach of this level could expose the 170.00 psychological level. The next contention level to watch is 169.04, the low of July 2. 

EUR/JPY daily chart