EUR/JPY - Bearish outside day candle, eyes EZ PMI reports

• Monday's bearish outside day candle indicates the rally from the recent low of 131.66 may have run out of steam
• Focus on Eurozone preliminary PMI readings & Catalan crisis

The three-day winning streak in EUR/JPY came to a halt on Monday as traders took profits on JPY shorts following Abe's victory in the snap elections.

The currency pair clocked a high of 134.13 in Asian trade on Monday before falling to an intraday low of 133.10. The bearish price action engulfed Friday's candle.   

Focus on German and EZ PMI

German preliminary PMI reports due today at 07:30 GMT are expected to show the pace of expansion in the manufacturing and service sector activity remained largely unchanged in October. The Eurozone PMI numbers are seen painting a similar picture.

A better-than-expected PMI numbers would be good news, but may not be able to lift EUR/JPY as Catalan crisis is likely to keep EUR bulls at the bay.

On the other hand, a marked deterioration of the activity could yield a drop in the EUR/JPY pair.

EUR/JPY Technical Levels

A negative price action today would confirm bearish outside day candle reversal. A break below 133.10 (support on 1-hour) would open doors for 132.89 (1-hour 200-MA) and 132.47 (Oct 19 low on 1-hour chart).

On the higher side, break above 133.29 (1-hour 100-MA) would expose 133.66 (1-hour 50-MA). Only a move above 134.13 (yesterday's high) would restore the upmove from the low of 131.66 (Oct 16 low).