EUR/JPY struggling near 119.00 handle despite of upbeat German IFO

The selling pressure around the shared currency seems to have abated following the release of German IFO business climate index, with the EUR/JPY cross bouncing off few pips from 2-1/2 month lows

Currently hovering around 119.00 handle, the cross gained some respite from better-than-expected German IFO business climate index. In fact, the gauge rose to 111 in Feb., up from previous month's 109.8 and 109.6 expected, and helped the cross to defend 119.00 handle, at least for the time being.

The cross, however, remained under intense selling pressure for the fourth session in the previous five and traded below 100-day SMA support as investors refrained from buying the shared currency amid ongoing political uncertainty in the Euro-zone. 

Meanwhile, bearish sentiment surrounding the USD/JPY major, despite of the prevalent risk-on mood that tends to dent the Japanese Yen's safe-haven demand, also collaborated to the pair's downslide on Wednesday and might restrict any swift recovery from the lowest level since early December. 

Technical levels to watch

On a sustained weakness below 119.00 handle, the cross is likely to drift towards 118.70-65 support area, which if broken would expose the very important 200-day SMA support near 117.70 region.

On the upside, 100-day SMA support break-point near 119.25-30 region now seems to act as immediate hurdle above which the cross could extend the recovery move towards 119.65-70 region.