EUR/JPY Price Forecast: Remains bullish above 173.00, overbought RSI warrants caution for bulls

• EUR/JPY gathers strength to near 173.10 in Wednesday's Asian session. 
• The positive bias of the cross prevails above the 100-day EMA, but the overbought RSI condition might cap its upside. 
• The first upside target emerges at 173.50; the initial support level to watch is 170.95.

The EUR/JPY cross gains momentum to around 173.10 during the Asian trading hours on Wednesday. The Japanese Yen (JPY) softens against the Euro (EUR) as traders reduce bets for an immediate interest rate hike by the Bank of Japan (BoJ) due to concerns over the economic fallout from higher US tariffs.

According to the daily chart, the constructive outlook of EUR/JPY remains intact as the cross holds above the key 100-day Exponential Moving Average (EMA). However, the 14-day Relative Strength Index (RSI) stands above the midline near 75.45, indicating the overbought RSI condition. This suggests that further consolidation cannot be ruled out before positioning for any near-term EUR/JPY appreciation.

The upper boundary of the Bollinger Band at 173.50 acts as an immediate resistance level for the cross. A decisive break above this level could see a rally to 174.52, the high of July 3, 2024. Further north, the next hurdle is seen at 175.43,  the high of July 11, 2024. 

On the flip side, the initial support level for EUR/JPY is located at 170.95, the low of July 10. 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