EUR/JPY probes the 129.00 area and recedes afterwards

• EUR/JPY retests daily highs near the 129.00 yardstick.
• EMU flash CPI rose 3.4% YoY, Core CPI gained 1.9% in September.
• US PCE up 4.3% YoY in August, Core PCE rose 3.6% YoY.

The offered note in the greenback allows the European currency and the risk-linked assets to regain some traction and now pushes EUR/JPY back to the 129.00 zone.

EUR/JPY looks to risk trends for direction

EUR/JPY looks to leave behind the recent weakness and attempt to extend the rebound from earlier weekly lows in the 128.60 area.

While the selling bias in the greenback favours the upside momentum in the single currency, declining US yields weigh on the buck and prompts the Japanese yen to regain some ground lost in past sessions.

In the euro docket, the salient event was the publication of advanced inflation figures in the broader Euroland, where headline CPI is expected to rise 3.4% YoY and the Core CPI 1.9% YoY in September.

In the US and prior to the release of the ISM Manufacturing, inflation tracked by the PCE rose 4.3% in a year to August and 3.6% YoY when excluding food and energy costs. In addition, Personal Income and Personal Spending expanded at a monthly 0.2% and 0.8%, respectively, in the same period.

EUR/JPY relevant levels

So far, the cross is up 0.01% at 129.82 and a surpass of 130.47 (weekly high Sep.29) would expose 130.74 (monthly high Sep.3) and then 131.02 (Fibo level). On the downside, the next support comes at 128.59 (weekly low October 1) followed by 127.93 (monthly low Sep.23) and finally 127.00 (round level).