EUR/JPY fades spike above 5-DMA

EUR/JPY fell back below 5-DMA level of 114.74 levels as markets failed to capitalize on the better-than-expected China CPI release.

Rejected at 114.88

The pair turned lower from the high of 114.88 levels despite having rebounded from the daily 50 moving average on Thursday. Moreover, the minor risk-on seen in currencies post CPI release failed to penetrate Asian equity markets, which continue to trade flat to negative.

Consequently, the bid tone around the Japanese Yen quickly recovered, thus ensuring the cross made its way back below 5-DMA. The cross was last seen trading around 114.65 levels.

EUR/JPY Technical Levels

On the daily charts, we see bearish 5-DMA and 10-DMA crossover. A break below 114.51 (session low) would expose 114.09 (confluence of 50-DMA + 38.2% of Brexit day high low), under which a major support is seen at 112.79 (Aug 24 low). On the other hand, a break above 115.00 (10-DMA) would expose 100-DMA of 115.43 which is still sloping downwards. Further gains could run into resistance at 115.79 (Oct 11 high).