EUR/JPY: bulls in control on broader themes, eyes break of 200-hr SMA

• EUR/JPY has moved into a consolidation above the 21-hr SMA.
• EUR/JPY: Yen remains at risk to the broader theme where Fed remains on cards for three hikes in 2018. 

EUR/JPY has moved into a consolidation above the 21-hr SMA and capped by the descending 200-hr SMA at 130.70. Currently, EUR/JPY is trading at 130.40, up 0.05% on the day, having posted a daily high at 130.48 and low at 130.33. Eyes are on the 200-4hr SMA.

USD/JPY: a cheap buy in at key 109.30 support, CPI not all that bad

EUR/JPY been tracking US equities and a rise in EUR/USD as the dollar comes under pressure following the US CPI data miss overnight. EUR/USD rallied to a high of 1.1946 and the cross made a high of 130.76. A period of market anxieties appear to have faded and the yen is on the back foot. 

Yen remains at risk to broader theme

Despite a weaker dollar and the drop to test the Tenkan line at 109.30, 110.00 remains on the cards while geopolitical tensions take a back seat and Central Bank divergence remains the broader theme at play. 

EUR/JPY levels

Analysts at Commerzbank noted that EUR/JPY has bounced just ahead of the March low at 128.96, it is unclear if the bounce is corrective only but currently we favour the idea of this support holding:

 "Should this hold the downside we would allow for recovery once more to initially 130.90 and also allow for a retest of the 132.64 three month resistance line and the 133.48 recent April high. Failure at 128.96 would push the March 2016 high at 128.23 to the fore. Below it sits the August 2017 low at 127.57," the analysts explained.