EUR/JPY trims gains, eases to 113.10 ahead of EU PMIs

The EUR/JPY cross ran through fresh offers just below 113.50 region and has now erased part of its early gains amid renewed buying interest around the Japanese Yen.

Currently hovering around 113.00-10 band, the cross on Wednesday plunged to the lowest level in over two-months as investors seemed disappointed from BOJ's decision to keep leave interest rates unchanged and adopt a new policy framework to target 10-year bond yields near zero.

The cross staged a recovery on Thursday as traders seemed inclined to take some profits off the table after intervention rhetoric from various Japanese officials. The recovery, however, lacked conviction as the prevalent cautious sentiment seems drive investors towards the perceived safety of the Japanese Yen, albeit the cross held on to the minor recovery gains. 

Next in focus would be the release of flash version of Euro-zone PMI prints, which would be looked upon for short-term trading opportunities.

Technical levels to watch

A follow through selling pressure below 113.00 handle, leading to a break through session low support near 112.90 level, the cross seems to immediately slide towards 112.60-50 support before heading back towards multi-week lows support near 112.10 region.

On the flip side, 113.45-50 area seems to have emerged as immediate resistance, which if conquered is likely to boost the cross further towards 113.90-114.00 resistance en-route its next major resistance near 114.35-40 region.