FxWirePro: EUR/JPY erases early gains, break below cloud to plummet prices further

EUR/JPY chart - Trading View 

EUR/JPY erases early gains, slips lower from session highs at 131.65 and was trading 0.03% lower on the day at 131.36 at around 10:15 GMT.

The single currency failed to capitalize on upbeat economic data released on Tuesday. Data released earlier on Wednesday showed eurozone inflation data was inline with expectations. 

Eurozone’s annualized Consumer Price Index (CPI) came in at 1.9% in June, matching expectations of 1.9% while easing slightly from May’s 2.0%, Eurostat’s preliminary reading of the CPI report showed earlier today.

The core figures also inched lower to 0.9% YoY in June inline with expectations and compared to 1.0% recorded in May.

On the other side, Japan’s Industrial Production grew past market consensus and prior to 22.0% YoY in May. Also, renewed Covid fears are sending a bid into the safe-haven assets.

Technical bias for the pair is also bearish. The pair is set to extend the pullback from multi-month highs at 134.124. 

Price action has slipped below 21-EMA which is proving strong resistance and capping any recovery attempt. The pair is onverge of break below daily cloud.

Momentum is strongly bearish. Break below daily cloud will plummet prices. Next major support lies at 110-EMA at 130.51 ahead of 38.2% Fib at 129.34.