EUR/JPY gravitates towards 122.50

Source: Dukascopy Bank SA
© Dukascopy Bank SA
"Fundamental factors stemming from a growing current account surplus are still likely to support the yen but also the euro. However, there is one key difference: the euro is significantly undervalued; the yen is not." 
- Danske Bank (based on FXStreet) 

Pair's Outlook 
The EUR/JPY entered a phase of consolidation, being anchored around the 122.50 level for nearly four weeks now. Overall, the cross is trading within the borders of the 121.00 and the 123.50 levels, with an upside development highly unlikely, as the 123.50 mark is also bolstered by the weekly R2, the Bollinger band, the weekly and the monthly R1s. On the other hand, a substantial decline is also doubtful, as the weekly PP and the 20-day SMA form immediate support around 122.40. Another sign is represented by the technical indicators, as they are giving distinctly bullish signals today. Ultimately, the pair is expected to remain within its trading range by the end of the year. 

Traders' Sentiment 
There are 58% of traders being long the Euro today, unchanged since Tuesday. Meanwhile, the share of buy orders declined from 55 to 49%.
© Dukascopy Bank SA

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