EUR/JPY bounces off lows post-German PMIs, lacks follow-through

• EUR/JPY found some support near 200-day SMA and reversed an early dip.
• Stronger German Manufacturing PMI print provided a minor boost to the Euro.
• The risk-on mood amid coronavirus concerns kept a lid on any further gains.

The EUR/JPY cross rallied over 50 pips in the last hour and jumped to the top end of its daily trading range, closer to the 121.00 post-German PMIs, albeit lacked follow-through

A fresh wave of the global risk-aversion trade – amid fears a global outbreak of the deadly coronavirus – underpinned the Japanese yen's perceived safe-haven demand and led to the pair's initial downtick to a session low level of 120.36.

Bulls still seemed reluctant

The cross, however, managed to attract some dip-buying near the very important 200-day SMA and got an additional boost following the release of better-than-expected German Manufacturing PMI, which unexpectedly rose to 47.8 for February.

The reading was much better than consensus estimates pointing to a dip to 44.8, from 45.3, and largely offset a slight disappointment from the Services PMI, which fell to 53.3 during the reported month as compared to 53.8 expected and 54.2 previous.

Despite the goodish bounce, concerns over deepening economic fallout from the coronavirus outbreak – in particular the export-driven German economy – held investors from placing any aggressive bets and kept a lid on any additional gains.

Moving ahead, market participants now look forward to the broader Eurozone Manufacturing and Services PMI prints for a fresh impetus. Apart from this, the broader risk sentiment might further contribute towards producing some short-term trading opportunities.

Technical levels to watch