EUR/JPY renews pressure on 127.56/41

EUR/JPY again fell more than 100 pips below the support at 128.30/22 and is currently testing a combination of the 200-day SMA and the monthly S1 level. If the sell-off drags on, weekly S1 at 126.53 may come into play. Overall, we continue to see bearishness as a temporary phenomenon and expect that the pair will move in accordance with the long-term technical indicators in the end.

SWFX market participants are largely undecided with respect to the future of EUR/JPY: 49% hold long positions, expecting more valuable Euro, and 51% are short, believing that the single currency is going to underperform. On average in its crosses the Japanese Yen is bought in only 30% of cases, while the Euro is bought in 47% of trades.