EUR/JPY reclaims 117.00 handle after EZ PMI

After initially dropping to 116.40 region, strong Euro-zone PMI readings helped the EUR/JPY cross to move back above 117.00 handle. 

According to the flash reading of Euro-zone PMI numbers for July, the composite EMU PMI came-in at 52.9, which was above 52.5 expected but slightly lower than 53.1 recorded in June. Moreover, the services PMI also surpassed market expectations of 52.3 and printed 52.7 as compared to June's 52.8. Meanwhile, manufacturing PMI at 51.9 just fell short of consensus estimate of 52.1 and previous 52.8. 

Earlier during the day, mixed sentiment kept traders on the back-foot and drove the pair lower marginally. However, the EUR/JPY cross jumped to reclaim 117.00 immediately after the release and confirmed a near-term trading range support around 116.30-20 region. 

On Thursday, the pair took a sharp knock to 116.00 neighborhood after BOJ Governor rejected the possibility of so-called "helicopter money". The pair, however, regained some lost ground after ECB left its monetary policy unchanged. Adding to this, renewed talks of additional fiscal stimulus package from the Japanese government has kept selling pressure around the Japanese currency intact and has limited any sharp slide for the EUR/JPY cross.

Technical levels to watch

On the immediate upside, 117.70-75 region might provide some resistance, above which the pair is likely to aim towards 50-day SMA strong resistance near 118.55-60 region. On the flip side, sustained weakness back below 116.50 immediate support has the potential to drag the pair immediately towards 115.80 before the pair drops further towards its next major support near 114.50 area.