EUR / JPY reverses decline, reaches gains near 131.50

• The EUR / JPY weekly lower leg found support near 131.30.
• The flash CPI of the EMU was 1.9% year-on-year, the core CPI rose 0.9% year-on-year.
• The US ADP report surprised to the upside with 692,000 jobs in June.

The EUR/JPY it is trading in a tight range around 131.50 in conjunction with broad-based consolidation mood in the rest of global assets.

EUR / JPY faces provisional support near 130.80

The EUR / JPY fights for direction after four consecutive daily pullbacks, always amid the better mood of the dollar, stable US yields and the tone offered in the Japanese yen.

In the latter case, the US dollar gains additional ground against its Japanese peer after the ADP report beat estimates, showing that the US private sector created nearly 700,000 jobs last month. The figure also bolsters optimism ahead of the Non-Farm Payrolls release on Friday.

However, the negative price action surrounding the single currency moderates any upside potential for the time being, leaving the cross hovering at the lower limit of the weekly range.

Earlier in the euro zone, advanced inflation figures indicated that upward pressure on consumer prices eased somewhat compared to the previous figure, as the headline CPI rose 1.9% year-on-year through June and 0.9% if they exclude energy and food costs.

Technical levels

So far, the cross is up 0.01% to 131.41 and a breakout of 132.34 (50-day SMA) would point to 132.69 (weekly high on June 23) and finally 133.00 (round level). On the other hand, the next support is lined up at 131.27 (June 30 weekly low) followed by 130.80 (100-day SMA) and then 130.04 (June 21 monthly low).