© Dukascopy Bank SA
- Naoyuki Shinohara, former top Japanese currency diplomat (based on CNBC)
Pair's Outlook
The European single currency inched only 45 pips lower against the Yen on Wednesday, with the immediate support cluster limiting the dips. BoJ Kuroda's statement earlier today strengthened the Japanese currency and triggered the risk-off sentiment to reemerge, causing broad EUR/JPY weakness. There is a strong demand area around 124.15, but the rapid Euro-selling is expected to drive the given cross even lower. The nearest obstacle is the three-year low of 122.08, but we believe the exchange rate will not drop that low over the day. The base case scenario is a close around the 123.00 major level, unless the Yen is suddenly weakened by some unforeseen fundamental factor.
Traders' Sentiment
Bulls retreated, but still take up the largest part of the market (61%), opposed to 69% yesterday. Now 63% of all orders are to sell the Euro.
© Dukascopy Bank SA