EUR/JPY plunges on BoJ's decision

Source: Dukascopy Bank SA
© Dukascopy Bank SA
"Yen rises, as we're seeing now, could have undesirable effects on Japan's economy and future inflation." 
- Haruhiko Kuroda, BoJ Governor (based on Reuters)


Pair's Outlook 
The EUR/JPY cross slightly overperformed on Wednesday, as it stabilised above the immediate resistance cluster of 119.25. Nevertheless, the Japanese currency received a massive boost earlier today, due to the BoJ announcing that no there will be no further easing. The reaction was so strong, that it caused the pair to drop to the third support area at 116.49, represented by the weekly S3. This level, however, is unlikely to prevent the Euro from slumping further, a breach of which is to cause the pair to eventually fall towards the 2013 low of 113.58. Price is expected to close above the 116.00 major level. 

Traders' Sentiment 
Bullish traders' sentiment remains unchanged at 57%, but the number of orders to sell the European single currency added 13% points, having risen up to a total of 60%.
© Dukascopy Bank SA

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