EUR/JPY price forecast: Remains above 171.50 following German PMI data

• EUR/JPY is testing its immediate support around the ascending channel's lower boundary at 171.70.
• Short-term price momentum remains weak as the currency pair trades below the nine-day Exponential Moving Average.
• The nine-day EMA at 171.96 could act as an initial resistance.

EUR/JPY steadies after two days of losses, trading around 171.70 during the early European hours on Thursday. The currency cross moves little following the release of HCOB Purchasing Managers' Index (PMI) data from Germany and the Eurozone.

The HCOB Preliminary German Composite Output Index arrived at 50.9 in August vs. 50.6 in July and 50.2 expected. The index was at its highest level in five months. Meanwhile, the Manufacturing PMI improved to 49.9 from 49.1 prior, beating the market consensus of 48.8. Services PMI fell to 50.1, against the expected 50.3 and previous 50.6 readings.

The technical analysis of the daily chart suggests a potential shift from bullish to bearish market bias as the currency cross is testing to break below the ascending channel pattern. The 14-day Relative Strength Index (RSI) is positioned slightly above the 50 mark, suggesting the bullish bias is in play. Further movements will offer a clear directional trend. However, the short-term price momentum is weaker as the EUR/JPY cross remains below the nine-day Exponential Moving Average (EMA).

A successful break below the ascending channel could cause the emergence of the bearish bias and put downward pressure on the EUR/JPY cross to target the 50-day EMA at 170.37, followed by the seven-week low at 169.72, which was recorded on July 31. Further declines would prompt the currency cross to test the two-month low at 168.46, registered on July 1.

On the upside, the immediate barrier appears at the nine-day EMA of 171.96, aligned with the psychological level of 172.00. A break above this crucial resistance zone would reinforce the bullish bias and support the currency cross to explore the region around 173.90, the highest since July 2024, recorded on July 28, 2025, followed by the upper boundary of the ascending channel around 174.50.

EUR/JPY: Daily Chart