EUR/JPY Price Forecast: Constructive outlook prevails, first upside barrier emerges above 173.00

• EUR/JPY strengthens to around 172.40 in Monday's early European session, adding 0.14% on the day. 
• The positive outlook of the cross remains intact above the key 100-day EMA, with the bullish RSI indicator. 
• The immediate resistance level emerges at 173.15; the first support level to watch is  171.12.

The EUR/JPY cross trades on a positive note near 172.40 during the early European session on Monday, bolstered by improved risk sentiment. However, hawkish remarks from the Bank of Japan (BoJ) Governor Kazuo Ueda might lift the Japanese Yen (JPY) and cap the upside for the cross. 

BoJ's Ueda spoke at a panel held on Saturday during the Federal Reserve's annual conference in Jackson Hole, Wyoming, saying that wages in his country are expected to remain under upward pressure due to a tight labor market. His comments signaled his optimism that conditions for another interest rate hike were falling into place. 

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 55.75, suggesting that further upside looks favorable. 

On the bright side, the first upside barrier for the cross emerges at 173.15, the upper boundary of the Bollinger Band. Any follow-through buying above this level could pave the way to the crucial resistance level in the 173.90-174.00 zone, representing the high of July 28 and the psychological level. 

In the bearish case, the initial support level for the EUR/JPY is seen at 171.12, the low of August 20. A breach of this level could drag the cross toward 170.45, the lower limit of the Bollinger Band. The next contention level is located at 170.00, the round figure.

EUR/JPY daily chart