Forex: EUR/JPY recovers the mark of 128.24 after EMU PMI

FXstreet.com (Barcelona) - The EUR/JPY collapsed on lackluster German and EMU PMI data during European trading Tuesday. The move comes on the heels of an upside attempt that was cut drastically short at the 129.16 level. After bottoming out at the 127.93 level (session low), the cross has recovered the mark of 128.24 in these moments.

In Germany, Markit Manufacturing PMI (April) yielded a figure of only 47.9, missing estimates of 49.0. Moreover, Markit Services PMI (April) came in at 49.2, relative to expectations of 51.0. Meanwhile, in the EMU, Markit Manufacturing PMI (April) was reported at 46.5 vs. a projection of 46.8. The Markit PMI Composite has also yielded 46.5 in April, matching a consensus of 46.5.

According to the UBS Research Team, “As long as support for the EUR/JPY at 127.82 holds, there is potential for the cross to extend its broader strength to 132.05 and then 134.38.”

“The EUR/JPY has broken the horizontal support at 129.70, followed by 128.80, in addition to breaking the short term ascending trend line shown above. Accordingly, a continuation of the bearish bias is likely, targeting a move towards the bottom of the range near 126.50 and 126.00 key support levels.” warns the ICN.com analyst team.