- EUR/JPY trades flat around 174.40 in Tuesday’s early European session.
- A positive view of the cross prevails above the 100-day EMA, with the bullish RSI indicator.
- The immediate resistance level emerges at 174.75; the first support level to watch is 173.48.
The EUR/JPY cross holds steady near 174.40 during the early European session on Tuesday. Political uncertainty in Japan ahead of the Liberal Democratic Party leadership election scheduled for October 4 could weigh on the Japanese Yen (JPY) against the Euro (EUR). The preliminary reading of HCOB Purchasing Managers’ Index (PMI) reports for September from the Eurozone and Germany will be in the spotlight later on Tuesday.
Technically, the positive outlook of EUR/JPY remains intact as the cross is well-supported above the key 100-day Exponential Moving Average (EMA) on the daily timeframe. The upward momentum is supported by the 14-day Relative Strength Index (RSI), which stands above the midline near 63.90. This displays the bullish momentum in the near term.
On the bright side, the first upside barrier emerges at 174.75, the upper boundary of the Bollinger Band. Sustained trading above this level could pick up more momentum and aim for 175.43, the high of July 17, 2024. Further north, the next resistance level is seen at the 176.00 psychological level.
In the bearish case, the low of September 19 at 173.48 acts as an initial support level for EUR/JPY. Any follow-through selling below the mentioned level could drag the cross toward 172.36, the low of September 11. The additional downside filter to watch is 171.35, the lower limit of the Bollinger Band.
EUR/JPY daily chart
