EUR/JPY attempts to reach 134

Source: Dukascopy Bank SA
© Dukascopy Bank SA
"There still remains a massive amount of euro short positions. The euro also looked undervalued in terms of yield gaps between the euro and the dollar. The euro could be bought back and the dollar's rebound may prove to be a temporary one." 
- JPMorgan Chase Bank (based on CNBC) 


Pair's Outlook 
Indeed, the strong resistance cluster pushed the EUR/JPY cross down yesterday, but not as far as anticipated. Immediate support at 135.63 was able to prevent the pair from falling deeper, although it is doomed to fail today. A sharp sell-off is expected today, with the nearest significant support located around 134.50. Nevertheless, the volatility might extend even beyond the 134 level, as the single currency began to undergo a correction. Technical studies, contrariwise, are showing bullish signs in the daily timeframe.

Traders' Sentiment 
Bearish market sentiment among SWFX traders remains unchanged at 55%. At the same time, the percentage of orders to acquire the Euro decreased dramatically, from 57 to 26%.
© Dukascopy Bank SA

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