EUR/JPY Price Forecast: Constructive outlook in place above 172.50

• EUR/JPY trades in positive territory near 172.60 in Tuesday's early European session. 
• The bullish outlook of the cross remains intact above the key 100-day EMA, with the bullish RSI indicator. 
• The immediate resistance level emerges at 173.11; the first support level to watch is in the 172.00-171.90 region. 

The EUR/JPY cross gains traction to around 172.60 during the early European session on Tuesday. Japanese Prime Minister Shigeru Ishiba on Monday vowed to remain in office, despite exit polls showing that his ruling Liberal Democratic Party (LDP) is certain to lose control of the upper house in Sunday's election. Political uncertainty and rising concerns over the direction of future fiscal policy in Japan weigh on the Japanese Yen (JPY) against the Euro (EUR). 

Technically, the constructive outlook of EUR/JPY remains in place as the cross is well-supported above the key 100-day Exponential Moving Average (EMA) on the daily chart. The upward momentum is reinforced by the Relative Strength Index (RSI), which stands above the midline near 66.65, suggesting that further upside looks favorable. 

On the bright side, the first upside barrier for the cross emerges at 173.11, the high of July 18. A decisive break above this level could pick up more momentum and aim for the crucial resistance level at 173.75, the upper boundary of the Bollinger Band and psychological level. Further north, the additional upside filter to watch is 174.52, the high of July 3, 2024. 

In the bearish case, the initial support level for the EUR/JPY is seen in the 172.00-171.90 zone, the psychological mark and the low of July 21. A breach of this level could drag the cross toward 170.81, the low of July 11. The next contention level is located at 170.00, a round figure. 

EUR/JPY daily chart