EUR/JPY drops from the monthly R1

Source: Dukascopy Bank SA
© Dukascopy Bank SA
"It's about whether the DPJ is going to block Iwata. Euro-yen sold off about 50 points on that pretty quickly. It's all about positioning." 
- BNP Paribas SA (based on Reuters)


Pair's Outlook

At the end of yesterday's trading session the pair surged up to the monthly R1 level at 126.16, but EUR/JPY was unable to breach this resistance in the first attempt. Thus, the price slides back towards the weekly PP at 124.00. If the dip gains a stronger impetus, it is likely to see the pair in the 122.42 - 123.15 area, where the 20-day and 100-day SMAs, together with monthly PP, situated.

Traders' Sentiment
The bulls and bears stay in an equilibrium, as the pair is traded flat during the recent month. A majority (70%) of orders in the pending market are placed for a long position and only 30% for a short. This indicates that traders expect EUR/JPY to experience extension of a bullish trend.
© Dukascopy Bank SA

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