EUR/JPY: Bulls rescued by upbeat EZ CPI, rebounds to 127.80

The bears loosened their grip on the Euro following the release of better-than expected Eurozone flash CPI estimates, allowing a tepid bounce in EUR/JPY back towards 128 handle.

EUR/JPY down almost 150 pips from four-month tops

The EUR/JPY pair now drops -0.48% to trade around 127.75 levels, having posted daily lows of 127.45. The cross tracks the recovery in the EUR/USD pair, after the Eurozone CPI data dropped less-than expected in June, the flash estimates revealed. Eurozone flash CPI a tad softer in June, but beats estimates

However, the offered tone remains intact as the Yen buyers retain control amid persisting risk-aversion amid mixed European equities and renewed weakness in Treasury yields across the curve.

Looking ahead, the pair will be driven by risk-trends and EUR dynamics, as the Euro is expected to continue its corrective mode against the US dollar ahead of a string of macro releases from the US, viz., personal spending, core PCE price index and revised consumer sentiment.

EUR/JPY: Technical Levels                               

Higher side: 128 (round figure), 128.23 (daily pivot), 1258.50 (psychological levels)

Lower side: 127.20 (5-DMA), 126.80 (key support), 126.44 (Jun 28 low)