Forex: EUR/JPY bounces from lows

FXstreet.com (Barcelona) - As this week retraces last week's gains, the EURJPY declines from 102.79 weekly high and gets closer to the psychological level at 100.00. The cross found its current low at 100.16 as market participants traded the release of the German CPI inflation report. The pair picked up there and moved along towards 100.72 daily high in rising sentiment after the publication of the ECB monthly report for October.

ECB officials consider the OMT program a necessary, proportional and effective instrument and is ready to activate it as soon as a country requests. The Eurozone inflation is expected to stay above 2% in 2012 and to ease after that. Despite the central bank's measures, growth "is expected to remain dampened by the necessary process of balance sheet adjustment in the financial and non-financial sectors, the existence of high unemployment and an uneven global recovery", according to the statement.

"The market is struggling to maintain upside pressure and the near term risk is shifting to the downside and in particular to the 99.50 September low. This is now exposed", wrote Commerzbank analyst Karen Jones, seeing the market vulnerable to further losses, and risk of even dropping towards 97.84 (61.8% retracement), while initial resistance is the 200 day moving average, at 101.79.