EUR/JPY is headed towards 127

If we regard the price action since the very beginning of 2012 as formation of the rising wedge pattern, then the fact of the lower boundary's violation at 130.30 should entail a sizeable sell-off until the currency pair manages to recuperate. However, there is a number of formidable supports beneath the spot that will likely attempt and eventually succeed at restoring the bullish tendency. These are the 2009 lows at 127, 200-day SMA at 125.60 and 23.6% Fibo retracement of an upward move initiated back in July of 2012.

The amounts of long and short positions have now completely levelled off as a result of consistent increase of the share of bullish towards the single European currency SWFX marketplace participants. In the meantime, the Euro is bought on average in 41% of cases among all its crosses, including EUR/JPY.