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FxWirePro: EUR/JPY struggles at 110-EMA, decisive break above required for upside continuation

EUR/JPY chart - Trading View 

Spot Analysis:

EUR/JPY was trading 0.13% higher on the day at 130.31 at around 10:00 GMT.

Previous Week's High/ Low: 130.56/ 129.54

Previous Session's High/ Low: 130.49/ 130.01

Fundamental Overview:

German retail sales increased much more than expected in June, data released by the Federal Statistics Office showed earlier on Monday.

German retail sales rose 4.2% on the month in real terms after an upwardly revised jump of 4.6% in May, beating forecasts at 2.0% by a large margin. 

According to the latest data released by Markit, eurozone July final manufacturing PMI printed at 62.8 vs 62.6 in the preliminary reading.

Data shows a slight loss in momentum in euro area manufacturing activity last month but overall conditions are still robust.

Last week's stronger than expected eurozone GDP and inflation data releases are likely to support the single currency.

However, there is lingering risk that the ongoing spread of the Delta variant could further delay the recovery, hence keeping upside limited.

Technical Analysis:

- EUR/JPY struggles at stiff resistance at 110-EMA

- Momentum studies are bullish, Stochs and RSI are biased higher

- MACD line shows bullish crossover on signal line

- Price action is above 200H MA and minor pullbacks have bounced off 110H EMA support

Major Support and Resistance Levels:

Support - 130.01 (200H MA), Resistance - 130.42 (110-EMA)

Summary: EUR/JPY finds stiff resistance at 110-EMA. Upbeat German retail sales and eurozone PMI data is likely to keep the common currency buoyed. Decisive break above 110-EMA is likely to see further upside. Scope for test of 55-EMA at 130.92.

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