EUR/JPY flirting with lows, below 124.00 handle after EZ CPI

The EUR/JPY cross held stable below the 124.00 handle, albeit maintained its offered tone for the fourth consecutive session following the release of Euro-zone flash CPI print.

Currently trading around 123.85-80 level, just a few pips away from session low, the cross had a muted reaction to the preliminary release of composite Euro-zone CPI print for May that showed easing inflationary pressure. In fact, the flash CPI print now estimates the region's inflation to drop to 1.4% during May, down from previous month's 1.9% and worse than 1.5% expected.

Today's EZ inflation figures did little to provide any fresh impetus to the shared currency, with the prevalent market risk-sentiment benefitting the Japanese Yen's safe-haven appeal and acting as an exclusive driver of the pair's retracement from higher levels.

From a technical perspective, the cross has repeatedly managed to hold 123.65 horizontal level on daily closing basis. Hence, it would be prudent to wait for a strong follow through selling pressure before confirming that a near-term top has been formed and the cross is susceptible to any near-term corrective slide.

Technical levels to watch

Weakness below 123.65 level might continue to find support near 123.10-12300 region, below which a fresh leg of downslide could drag the cross back towards its next support near mid-122.00s. On the flip side, 124.20-25 area now seems to have emerged as immediate resistance, which if cleared decisively has the potential to lift the cross back towards the key 125.00 psychological mark.