EUR/JPY keeps the red near 129.00 post EZ CPI, ECB minutes remains in focus

The EUR/JPY cross extended previous session's pull-back and dropped to the lower end of the weekly trading range around the 129.00 handle post-EZ inflation figure.

The cross held weaker near session lows after the final Euro-zone CPI print matched original estimates of slowing inflationary pressure and came-in to a show m-o-m drop of 0.5% in consumer prices, with yearly rate holding at six months low level of 1.3%. Meanwhile, the core CPI (excluding food, energy, alcohol, and tobacco) fell more than originally estimates on a monthly basis but seems to have been largely negated from a slight uptick in yearly number.

   •  Eurozone flash Core CPI y/y ticks higher in July

Other data released on Thursday showed Euro-zone trade surplus during the month of July rose to €22.3 billion, up from previous month's €19.7 billion and better than €20.4 billion surplus expected. 

Today's mixed EZ economic data did little to provide any immediate boost to the shared currency as investors' focus remains glued to the ECB minutes. Against the backdrop of Wednesday's news headlines, that the ECB President Mario Draghi would not discuss monetary policy outlook at next week's Jackson Hole Symposium, investors would look for clues over a possible tapering in September in order to determine the next leg of directional move for the shared currency.

   •  Cautious ECB means EUR/$ to still move lower before moving higher - ING

Technical levels to watch

On a sustained weakness below 129.00-128.90 area, the cross is likely to accelerate the fall towards 128.55 level before eventually targeting towards the 128.00 handle. On the upside, 129.35 level now seems to act as an immediate hurdle, above which the cross is likely to make a fresh attempt to conquer the key 130.00 psychological mark and head towards testing its next resistance near the 130.45-50 region.