EUR/JPY clings to gains near mid-132.00s ahead of a possible Catalonia independence declaration

The EUR/JPY cross traded with a mild positive bias for the third consecutive session and inched back closer to the top end of its two-week old broader trading range. 

Currently holding with gains around mid-132.00, off session tops touched in the past hour, the shared currency remained resilient despite Spanish political unrest. Spain's separatism crisis faces a decisive moment on Tuesday, with Catalonia's President Carles Puigdemont hoping for a unilateral declaration of independence.

   •  Market movers today – Danske Bank

Against the backdrop of today's better-than-expected Japanese current account balance, the prevalent cautious environment was seen lending some support to the Japanese Yen and kept a lid on the pair's up-move.

From the Euro-zone, upbeat German trade balance data was largely negated by and unexpected contraction in French industrial production data. 

   •  Germany: Final chapter of strong August - ING

Looking at the broader picture, the cross remains confined within a 100-pips broader trading range and hence, traders are likely to wait for a decisive break through before committing to the pair's next leg of directional move. 

Technical levels to watch

Immediate resistance is pegged near 132.75-80 area and is closely followed by the 133.00 handle. A clear break through the mentioned hurdles should lift the cross immediately towards 133.40 intermediate resistance ahead of 133.80 barrier.

On the flip side, weakness below 132.30-25 zone is likely to find fresh buying interest near the 132.00 handle and 131.80 horizontal support, which if broken would mark a bearish break and turn the cross vulnerable to head back towards testing the 131.00 round figure mark.