EUR/JPY undergoes a correction

EUR/JPY is close to completing its bearish correction after the currency pair touched upon the upper boundary of the emerging channel. The floor for the current sell-off is seen at the level of 125 yen, which is the present location of the lower trend-line forming the pattern. The price should then rally towards the 55-day SMA at 127.50, while the multi-week target is 129.50, where the rate is expected to meet the 100-day SMA and the 10-month down-trend.

The distribution between the bulls and bears in the market remains perfectly unchanged. At the moment, 56% of open positions are long and 44% are short. In the meantime, the percentage of orders to sell the Euro plummeted from 73 to 58%.