EUR/JPY - Bears await a close below 130.98, focus on PMIs

• A close below 130.98 would confirm losses to 128.50-127.57 - Commerzbank.
• Focus on German Eurozone Nov. preliminary PMI readings.

EUR/JPY has hit a four-day low of 131.41 in Asia, strengthening the case for the bearish trend reversal, although Commerzbank technical analyst believes that a close below 130.98 is necessary to crowd out bulls and open up downside towards 128.50-127.57.

As of writing, the currency pair is trading 131.45 levels. Monday's long-legged Doji candle did little to restore the bullish mood. Moreover, the follow-through in the subsequent days was anything but encouraging. Still, the EUR bulls can take heart from the fact that the cross is holding above the 100-day MA level of 131.30.

Focus no preliminary PMI readings

Kathy Lien from BK Asset Management writes, "a marginally firmer data is expected for Germany and softer numbers are expected for France, but with industrial production and factory orders falling over the past month, we believe the risk is to the downside for the German and Eurozone reports."

A weaker-than-expected reading would add credence to calls for policy hibernation at the ECB and may see EUR/JPY close below 130.98.

EUR/JPY Technical Levels

A break below 131.17 (Monday's Doji candle low) would expose support at 130.60 (Sep. 15 low) and 130.40 (Aug. 16 high). On the higher side, breach of the hurdle at 131.55 (session high) could yield a rally to 131.82 (5-day MA) and 132.00 (psychological level).