- EUR/JPY remains bid but stays below 132.00.
- 10Y German-Japan yield spread narrows in EUR negative manner.
EUR/JPY defended the 100-day MA support yesterday for the second time this week, but the bullish move appears to have weakened near 132.00 levels in Asian session today.
As of writing, the EUR/JPY pair is trading around 131.88 levels. The cross clocked a high of 131.97 earlier today.
Capping the gains could be the German-Japanese 10-year yield spread which has narrowed to 31.5 basis points; its lowest level since Nov. 8.
Focus on German IFO readings
The IFO readings will indicate whether the political uncertainty in Germany is having a negative impact on the business climate in the Eurozone's strongest economy. A weaker-than-expected reading could push the cross back to 100-day MA level of 131.33.
EUR/JPY Technical Levels
A break below 131.33 (100-day MA) would open up downside towards 130.60 (Sep. 15 low) and 130.40 (Aug. 16 high). On the other hand, a move above 132.00 (zero levels) would expose 132.39 (10-day MA) and 132.67 (50-day MA).
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