EUR/JPY refreshes session lows, near mid-128.00s on German ZEW

Having failed to sustain early up-move beyond the 129.00 handle, the EUR/JPY cross refreshed session lows following the release of German Zew economic expectations survey.

Currently trading around mid-128.00s, the cross ran through some fresh offers after the German ZEW economic sentiment index dropped for the third month in a row and showed a high degree of nervousness over the future path of growth. Meanwhile, the current situation index unexpectedly rose to 86.7 versus 85.5 expected and 86.4 reported previously.

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The market seems to have largely ignored diminishing demand from traditional safe-haven assets, including the Japanese Yen, with an offered tone surrounding the shared currency failing to assist the cross to build on its recovery move from 1-1/2 month lows touched on Friday.

With the only scheduled release out of the way, a slight improvement in investors' risk appetite might contribute towards limiting further downslide, with a modest recovery attempt back towards the 129.00 seems a distinct possibility. 

Technical levels to watch

A follow through weakness below the 128.35-30 region would turn the cross vulnerable to break below the 128.00 handle and aim towards retesting 127.55 level (Friday's low). On the upside, sustained momentum back above the 129.00 handle now seems to help the cross to extend its recovery move towards 129.75-80 resistance en-route the key 130.00 psychological mark.