The EUR/JPY cross staged a recovery from the lower end of recent trading range support near 114.00 handle, coinciding with 50-day SMA.
Currently trading closer to session high around 114.60 region, the cross is benefitting from improving investor risk-appetite that is seen denting the safe-haven appeal of the Japanese Yen. Adding to this, additional recovery in the EUR/USD pair is further contributing to the bid tone around the EUR/JPY cross.
In absence of any major economic releases due from the Euro-zone, broader market risk sentiment would continue to be sole driver of the pair's momentum ahead of Wednesday's Chinese macro data. Data from world's second largest economy would drive investor's risk-appetite and determine the safe-haven demand of the Japanese Yen, eventually providing some impetus for the EUR/JPY cross.
However, this week's ECB monetary policy decision would be the next big fundamental trigger that would help investors to determine the pair's next leg of directional move.
Technical levels to watch
Immediate upside resistance is pegged near 114.70-75 area above which the cross is likely to surpass 115.00 handle and head towards testing 100-day SMA resistance near 115.20 region. On the downside, 50-day SMA near 114.10-114.00 has emerged as immediate strong support, which if broken is likely to accelerate the slide immediately towards 113.50-45 intermediate support ahead of the next major support near 112.85 level.