EUR/JPY down into 157.80 in broad-market risk aversion moves sparked by US CPI beat

The EUR/JPY is down around 0.5% from the day's highs, trading down below the 158.00 handle as markets rotate out of risk assets following a data-beat for the US Consumer Price Index (CPI) print that showed inflation continues to shrink much slower than investors are hoping for.

US CPI inflation holds steady at 3.7% in September vs. 3.6% forecast

With US inflation sticking higher than expected, market fears of the Federal Reserve (Fed) sticking to their higher-for-longer strategy on interest rates are back on the rise, and investors will now be keeping an eye out for an additional rate hike from the US central bank before the end of the year.

Japan's Producer Price Index (PPI) and Machinery Orders figures on Wednesday broadly missed the mark, with Japan PPI printing at a disappointing -0.3% for September against the forecast 0.1% uptick, and slipping further down from the previous month's 0.3%.

Machinery Orders for August also declined by 0.5%, an improvement from the previous reading of -1.1% but still far below the anticipated read of 0.4%.

With the dust settling after the US CPI inflation market-beater, Euro (EUR) traders will now be looking ahead to a speech on Friday from European Central Bank (ECB) President Christine Lagarde.

President Lagarde is due to take part in a joint-panel discussion at the World Bank Group and International Monetary Fund (IMF) annual meeting currently being held in Morocco. The panel is slated to be a discussion centered on the global economy, and investors will be keeping an ear out for any hints about the ECB's stance looking forward.

EUR/JPY Technical Outlook

Intraday action sees the EUR/JPY twisting around familiar levels, with the pair getting knocked back into the early week's trading range while a flat 200-hour Simple Moving Average (SMA) sits below current price action near 157.20.

On the daily candlesticks, the EUR/JPY remains constrained by the 50-day SMA, and continues to catch bids from the rising trendline from May's swing low into 145.00, and the ceiling on near-term bullish momentum remains the 159.00 major handle.

EUR/JPY Daily Chart

EUR/JPY Technical Levels