Forex: EUR/JPY quiet at 128.00 after Euro PMIs

FXstreet.com (Barcelona) - As the corrective movement in late April found support above the 127.00 handle, the EUR/JPY has been drawing Doji candles around the 128.00 line in the last couple of days. Today is no different, and the cross is quoting at such area after reaching as low as 127.77 ahead of the European opening. Markit manufacturing PMI data in Euro area countries are surprising investors positively, pointing to higher figures than the ones revealed in the flash report, but still contractionary.

The EMU PMI dropped slightly from 46.8 to 46.7, but analysts were expecting 46.5. The German figure eased from 49.0 to 48.3, instead of 47.9. The Italian number rose from 44.5 to 45.5, above 44.8 expected. The Spanish PMI came in higher, from 44.2 to 44.7 in April, beating 44.5 consensus. The Greek manufacturing figure rose from 42.1 to 45.

“It is downside corrective near term and we would allow for further losses and a slide back to the 125.00, the low from mid April”, wrote Commerzbank analyst Karen Jones, awaiting a close below 127.71 for such occurrence. “The risk has increased that we will see a deeper retracement towards the 122.65 5 month uptrend”, she added, pointing to resistance at 128.90/130.00.