EUR/JPY clings to modest gains, above 121.00 mark post-German PMIs

• EUR/JPY builds on the overnight late rebound from 200-day SMA.
• Stronger German PMIs provided a modest lift to the shared currency.
• Fading safe-haven demand for the Japanese yen remained supportive.

The EUR/JPY cross held on to its mildly positive tone above the 121.00 mark and refreshed session tops post-German PMI prints.

The cross built on the previous session's late rebound from the very important 200-day SMA, or over two-week, and edged higher through the early European session on Friday.

It is worth recalling that the cross extended its recent pullback from multi-month tops and lost some additional ground on Thursday following a dovish sounding ECB policy statement.

The shared currency got a minor lift on the last trading day of the week following the release of stronger-than-expected German flash Manufacturing and Services PMI prints for January.

In fact, the Manufacturing PMI, though remained in the contraction territory, improved to 45.2 during the reported month from November's final reading of 43.7 and 44.5 expected.

Adding to this, the Services PMI also surpassed market expectations and came in at 54.2 for January as against consensus estimates pointing to an uptick to 53.0 from 52.9 previous.

Apart from this, a modest recovery in the global risk sentiment – despite concerns about China's coronavirus outbreak – weighed on the Japanese yen's safe-haven status and remained supportive.

It, however, remains to be seen if the cross is able to capitalize on the recovery move or meets with some fresh supply at higher levels as traders now eye the Eurozone PMI prints for a fresh impetus.

Technical levels to watch