EUR/JPY holds 113.00 after IFO but struggling to move beyond 10-DMA

The EUR/JPY cross failed to extend its tepid recovery bounce and reversed some of its gains from 10-day SMA. The pair, however, has managed to hold its neck above 113.00 handle and is currently trading with marginal gains at around 113.20-25 band. 

Weaker-than-expected release of the German IFO Business Climate failed to provide assist the pair to build on to its recovery momentum from a 4-day low touched on Wednesday. A downbeat sentiment around European equity markets is boosting the safe-haven appeal of the Japanese Yen and is restricting any further up-move. Meanwhile, a broad based greenback retracement is helping the EUR/USD major to recover some of its Wednesday's lost ground and is extending some downside support to the cross. 

Next in focus would be US economic releases, which would further drive the EUR/USD major and determine the safe-haven demand of the Japanese Yen, eventually driving the EUR/JPY cross.

Technical levels to watch

On a sustained break back below 113.00 handle, the weakening trend is likely to get extended towards 112.60-50 support, en-route multi-week lows support near 112.30 level. Meanwhile, strong recovery momentum above 10-day SMA near 113.30 region should lift the pair immediately towards 113.50-55 resistance, above which the pair seems to make a fresh attempt towards reclaiming 114.00 handle.