EUR/JPY Price Forecast: Positive bias prevails, key upside barrier emerges near 175.00 

• EUR/JPY trades with mild gains around 174.50 in Wednesday'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 is seen in the 174.90-175.00 region; the first support level to watch is 173.48.

The EUR/JPY cross posts modest gains near 174.50 during the early European trading hours on Wednesday. The Japanese Yen (JPY) softens against the Euro (EUR) after the latest S&P Global flash Japan Manufacturing Purchasing Managers' Index (PMI) fell at the fastest pace in six months in September. 

Additionally, concerns over political uncertainty in Japan ahead of the Liberal Democratic Party (LDP) leadership election scheduled for October 4 could prompt the Bank of Japan (BoJ) to delay raising interest rates, which, in turn, is seen as weighing on the JPY.

Technically, the constructive outlook of EUR/JPY remains in play, with the price being well-supported above the key 100-day Exponential Moving Average (EMA) on the daily timeframe. The upward momentum is reinforced by the 14-day Relative Strength Index, which stands above the midline near 64.95. This suggests that further upside looks favorable in the near term. 

On the bright side, the crucial upside barrier emerges in the 174.90-175.00 zone, representing the upper boundary of the Bollinger Band and a psychological level. 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. 

On the downside, the initial support level for EUR/JPY is located at 173.48, the low of September 19. Any follow-through selling below this level could see a drop to 172.36, the low of September 11. The additional downside filter to watch is 171.53, the lower limit of the Bollinger Band.

EUR/JPY daily chart