EUR/JPY surrenders tepid recovery gains, back closer to 118.00 handle

The EUR/JPY cross stalled tepid recovery move just ahead of mid-118.00s and retreated around 40-pips from session tops to currently trade around 118.10 region.

Persistent weaker investors' sentiment, as depicted by a weaker opening in the European equity markets, continues to boost the Japanese Yen's safe-haven appeal and has been a key factor driving the cross lower for the seventh consecutive session.

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Meanwhile, a downward revision of the final Euro-zone services PMI prints for March further weighed on the shared currency and collaborated to the prevalent bearish sentiment surrounding the shared currency triggered by recent reports suggesting that the ECB policymakers remains wary of market's misinterpretation of the central bank's message following its March 9 monetary policy meeting. 

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In absence of any major market moving economic releases from the Euro-zone, investors would remain focused on the US economic docket. Today's US macro data would influence market risk sentiment and derive the Japanese Yen's safe-haven demand, eventually providing some trading impetus for the EUR/JPY cross.

Technical levels to watch

Bears would be eyeing for a sustained break through 117.60 support (200-day SMA), below which the cross is likely to accelerate the slide towards the 117.00 handle before eventually dropping to test 116.40-35 area. Meanwhile on the up-side, sustained recovery above mid-118.00s might trigger a short-covering rally, lifting the cross back beyond the 119.00 handle towards testing its next hurdle near 119.30 region.