EUR/JPY clings to modest recovery gains, above 132.00 handle ahead of German CPI

   •  Stalls post-ECB slump and stages a modest recovery from 2-week lows. 
   •  Safe-haven demand/Catalan uncertainty cap further up-move.
   •  German CPI in focus to provide fresh impetus. 

The EUR/JPY cross stalled its post-ECB sharp corrective slide and gained some positive traction at the start of a new trading week. 

Currently trading around 132.15-20 band, just a few pips away from session tops touched in the past hour, the cross has now recovered part of Friday's slump back closer to the 131.75-65 strong support and was being supported by a modest pick-up in the shared currency. 

However, a slight deterioration in investors' appetite for riskier assets, as depicted by the prevalent cautious sentiment around European equity markets, was seen supporting the Japanese Yen's safe-haven appeal and capped further up-move. 

It would now be interesting to see if the cross is able to build on the tepid recovery move or once again meets with some fresh supply at higher levels as traders now look forward to the prelim German CPI figures for fresh impetus. 

Against the backdrop of last week's dovish ECB taper, political development in Catalonia might continue to keep a lid on any near-term sharp appreciating move for the cross. 

   •  Support for independence falls to 33% in Catalonia – El Mundo

Technical levels to watch

A follow-through buying interest beyond 132.30-35 area could accelerate the recovery move towards 132.80-85 horizontal resistance, above which the cross is likely to surpass the 133.00 handle and head towards testing its next major hurdle near the 133.40 region. 

On the flip side, the 132.00-131.90 zone is likely to protect the immediate downside, which if broken could extend the pair's corrective slide towards 131.30 intermediate support en-route the 131.00 handle.