EUR/JPY consolidating above 113.00 ahead of EU CPI

A verbal intervention from Japanese officials helped the EUR/JPY cross to recover from session low and move back into positive territory to currently trade above 113.00 handle ahead of the EU CPI.

Earlier during Asian session, the Japanese currency outperformed its European counterpart as cautious sentiment around equity markets supported Yen's safe-haven appeal. However, a broadly weaker greenback lifted the EUR/USD major and limited sharp downslide in the cross.

The final print of composite Euro-zone CPI followed by ECB Monetary Policy Meeting Accounts would be next relevant economic releases, which would provide a fresh impetus for the cross. Focus would also be on US macro releases that would drive JPY's safe-haven demand and eventually drive the EUR/JPY cross.

From technical perspective, the pair has repeatedly bounced off its immediate support near 112.40-30 area but has failed to decisively move back above 114.00 handle and continued with its consolidation around 10-day SMA. Hence, it would be prudent to wait for a decisive break through this recent trading range before concluding the pair's near-term trajectory.

Technical levels to watch

Momentum above 113.50 level might continue to confront strong resistance near 114.00 round figure mark, above which the recovery is likely to get extended towards 114.80-85 horizontal resistance. On the flip side, sustained weakness below 112.40-30 immediate strong support is likely to accelerate the fall immediately towards 111.00 support with intermediate support around 111.50 level.