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- Sumitomo Mitsui Trust Bank (based on Reuters)
Pair's Outlook
The EUR/JPY pair experienced a technical correction on Monday, which helped the cross to close trade above 120.00. The immediate resistance, namely the weekly PP and the monthly S1, was strong enough to limit yesterday's gains and could now prompt the Euro to weaken against the Yen again. Technical indicators also suggest the bearish momentum is to prevail, but it is uncertain whether the pair will be able to stabilise above 119.75—a psychological level that kept the pair afloat for nearly 12 weeks now. In case this area is breached, the next target will be the cluster around 119.25, represented by the 100-day SMA, the weekly S1 and the lower Bollinger band.
Traders' Sentiment
Market sentiment worsened even further, as now 73% of all open positions are short, compared to 70% on Monday.
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