EUR/JPY tests monthly S1

The 55-day SMA, in conjunction with the monthly S1, seems to have stopped the sell-off, thereby leaving the door open for the re-emergence of the buying pressure. The rally from here is also supported by the majority of technical indicators on the weekly and monthly time-frames. However, the bearish correction may still continue, potentially down to the 2009 highs at the level of 139.

Regardless of a recent decline seen in EUR/JPY and a significant decrease of the orders to buy the Euro (within 100 pips from the spot the share of buy orders plunged from 92% down to 47%), the effect on the sentiment was minimal—52% of positions are long and 48% are short.