EUR/JPY struggling for direction at 113.00 mark, EU PMIs in focus
|After seesawing between tepid recovery gains and minor losses, the EUR/JPY cross finally seems to have stabilized around 113.00 handle.
A broad based US Dollar retracement helped the EUR/USD pair to stage a minor recovery from multi-month lows touched in the aftermath of ECB monetary policy decision, eventually leading to a minor recovery in the EUR/JPY cross. However, the prevalent cautious investor sentiment around equity markets is underpinning the Japanese Yen's safe-haven appeal and restricted the pair's recovery from monthly lows touched on Friday.
Next on tap would be the flash version of Euro-zone PMI prints for October and would be looked upon for some respite for the shared currency. Meanwhile, broader market risk sentiment would derive the Japanese Yen's safe-haven demand and contribute towards the EUR/JPY pair's movement on Monday.
Technical levels to watch
From current levels, a follow through selling pressure below session low support near 112.85-80 region, leading to a subsequent break below monthly lows support near 112.60 region, should turn the cross vulnerable to head towards September monthly lows support near 112.00 handle.
On the flip side, any recovery attempt might now confront immediate resistance near 113.50 area above which a bout of short-covering is likely to lift the cross immediately towards 50-day SMA resistance near 114.00 round figure mark. This 50-day SMA region now seems to cap any near-term recovery, which if conquered would negate any near-term bearish bias.
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