EUR/JPY holds above 4-hour 20-MA, eyes EZ PMI data

EUR/JPY is trading flat lined above 4-hour 200-MA level of 124.14 as EUR traders look to Eurozone PMI release for evidence that the first quarter growth was more than just a ‘flash in the pan’. 

The preliminary manufacturing PMI due at 08:00 GMT is expected to show the pace of expansion in the activity slowed slightly in June. German data due at 07:30 GMT is expected to show a similar slowdown in the activity. 

A weaker-than-expected data could yield a pull back in the EUR pairs. On the other hand, a strong data would not only strengthen the EUR, but may also lift the broader market sentiment, leading to losses in the Yen. 

Ahead in the day, the cross may also cheer a potential technical recovery in the oil prices.  

EUR/JPY Technical Levels

The cross was last seen trading around 124.22. The daily chart shows a classic bull flag - bullish continuation pattern. We did see a bullish break on Wednesday, but the cross is having a hard time chewing through the resistance - 124.50 - offered by the trend line sloping higher from May 18 low and May 30 low. A break higher would open up upside towards 125.00 (zero levels) and 125.31 (June 2 high). On the other hand, a break below 124.14 (4-hour 200-MA) would expose 123.66 (June 21 low) and 123.15 (May 30 low).