EUR/JPY Price Forecast: Positive view prevails above 171.00, eyes on French politics 

• EUR/JPY drifts lower to near 171.25 in Thursday's early European session.
• Positive view of the cross prevails above the 100-day EMA, but bearish RSI indicator warrants caution for bulls. 
• The immediate resistance level emerges at 172.67; the first support level to watch is 170.60.

The EUR/JPY cross loses momentum to around 171.25 during the early European session on Thursday. The Euro (EUR) weakens against the Japanese Yen (JPY) amid fears of a French political crisis. France is braced for a new political crisis as the minority government of François Bayrou appears almost certain to be toppled in a confidence vote next month, amid deep political divisions over an unpopular austerity budget and debt-reduction plan. 

Technically, the constructive outlook of EUR/GBP remains in place as the cross is well-supported above the key 100-day Exponential Moving Average (EMA) on the daily chart. Nonetheless, further consolidation or temporary sell-off cannot be ruled out as the 14-day Relative Strength Index (RSI) stands below the midline near 46.65, displaying bearish momentum in the near term. 

On the bright side, the first upside barrier emerges at 172.67, the high of August 25. Sustained trading above this level could pick up more momentum and aim for 173.00, representing the upper boundary of the Bollinger Band and a round figure. Further north, the next resistance level is seen at 173.90, the high of July 28. 

In the bearish case, the lower limit of the Bollinger Band of 170.60 acts as an initial support level for EUR/JPY. A breach of this level could drag the cross toward the 170.00 psychological level. The additional downside filter to watch is 169.82, the low of August 5. 

EUR/JPY daily chart