FxWirePro: EUR/JPY fails to capitalize upbeat German IFO data, focus on BoJ policy meet for impetus

Chart - Courtesy Trading View 

EUR/JPY was trading 0.17% lower on the day at 144.51 at around 10:45 GMT.

The pair closed a bearish gap open and edged higher to test 5-DMA resistance after upbeat German IFO data.

Data released earlier on Monday showed the headline German IFO Business Climate Index climbed to 88.6 in December versus the previous reading of 86.3 and the forecast of 87.2.

Meanwhile, the Current Economic Assessment improved to 94.4 points as against November's 93.1 and 93.5 expected.

The IFO Expectations Index was up to 83.2 in December from the previous month’s 80.0 and against the estimates of 82.0. 

EUR/JPY failed to hold on to gains. Caution prevails ahead of the Bank of Japan (BoJ) monetary policy meeting on Tuesday. 

Reports over the weekend showed Japanese government could revise the Bank of Japan's 2% inflation target and make it more flexible. 

The revision could allow the BoJ to tweak its ultra-loose policy stance, which could benefit the JPY.

Technical Analysis:

- EUR/JPY recovery capped at cloud top and 5-DMA

- Price action grinds sideways at 200H MA support

- MACD and ADX support upside in the pair

- Stochs poised for bearish rollover from overbought levels

Major Support Levels: 143.97 (55-EMA), 142.47 (110-EMA)

Major Resistance Levels: 144.91 (5-DMA), 146.19 (Upper BB)

Summary: EUR/JPY trades with a neutral bias. Focus on BoJ policy meet for impetus.