EUR/JPY holding gains to 115.00 handle after EU CPI

The Japanese Yen remained well offered across the board helping the EUR/JPY cross to extend the near-term upward trajectory further beyond 50-day SMA and moved above 115.00 psychological mark for the first time since late July.

Currently hovering around 115.00 handle, trading higher for fifth consecutive session, the cross failed to gain further traction following the release of slightly lower-than-expected preliminary release of Euro-zone inflation figures for the month of August. The flash version of the composite Euro-zone CPI came-in at 0.2% m-o-m and 0.8% y-o-y, slightly weaker-than expected 0.3% and 0.9% respectively.

Meanwhile, rising expectations of further monetary easing is weighing on the Japanese currency. Moreover, the prevalent risk-on sentiment in equity markets is also denting the safe-haven demand for the Japanese Yen and extending support to the EUR/JPY cross. 

Technical levels to watch

A follow through buying interest is likely to boost the pair further towards 115.70 resistance, marking 50% Fibonacci retracement level of 122.00-109.47 Brexit-led slide above which the pair seems all set to extend its near-term recovery trend beyond 116.00 handle, towards 116.50-60 horizontal resistance.

Meanwhile on the downside, 50-day SMA near 114.40-35 region now becomes immedite support, which if broken seems to immediately drag the cross to 114.00 handle. Sustained weakness below 114.00 handle might negate possibilities of any further up-move and could drag the pair back towards 113.00 round figure mark support.