EUR/JPY trims gains but manages to hold 114.00 level

After an initial spike to 114.70 region, the EUR/JPY trimmed some of its gains and dipped back below 114.00 handle before retracing few pips to currently trade around 114.25-30 region.

Monday's move was primarily driven by a minor retreat in the shared currency on slight disappointment from manufacturing PMI numbers from Spain, Italy and France. However, the composite number and German print witnessed a minor up-tick from preliminary estimates and restricted any sharp slide for the common currency. 

Meanwhile, the cross has failed to gain any upside momentum as the Japanese Yen showed resilience to give-up any of its sharp gains recorded on Friday after BOJ left interest rates and monetary base unchanged. 

In absence of any economic releases, directly related, the cross is likely to take cues from prevalent risk sentiment around equity markets and the release of US ISM manufacturing PMI, which might have a diverging effect on the shared currency and the Japanese Yen, and eventually drive the EUR/JPY cross.

Technical levels to watch

On a sustained weakness back below 114.00 handle, the pair seems to extend its downward trajectory back towards 112.40-35 horizontal support before heading towards July monthly lows support near 111.00-110.85 region. On the flip side, session high level near 114.80 area remains immediate resistance to watch for, which if conquered seems to boost the pair immediately towards 116.30-35 region strong resistance area.