EUR/JPY clocked a session high of 129.12 in Asia before trimming gains to trade around 128.90 levels. The cross has been sloping upwards along the 50-DMA, which is currently seen at 128.64 levels. 

Draghi to avoid Sinatra 2.0

ECB President Draghi speech is due today at 7:00 GMT. The central bank chief is likely to avoid using words that would excite markets. Draghi’s speech in Sinatra in late June led to spike in the bond yields and the EUR. 

The strength in the EUR is now a cause of concern for the policymakers. Thus, Draghi might attempt EUR jawboning. Post Draghi speech, the preliminary PMI numbers across the Eurozone could influence the common currency. 

Meanwhile, the Yen side of the story remains vulnerable to the broader market sentiment. 

EUR/JPY Technical Levels

The daily chart shows a lower highs and lower lows pattern, with the 14-day RSI hovering below 50.00 [neutral] levels. 

A break below 128.57 [50-DMA] would open up downside towards 128.05 [Aug 11 low] and 127.56 [Aug 18 low]. On the other hand, a break above 129.54 [July 31 low] could yield 130.00 [psychological level + falling channel hurdle] and 130.40 [Aug 16 high].