EUR/JPY: reversal is expected

Note: This section contains information in English only.
Source: Dukascopy Bank SA
"We believe that the risk of Frexit has materially receded and markets will focus on a possible ECB policy shift later this year. We believe the ECB will announce its taper plans in the autumn, which ultimately will help to reduce the market's singular focus on the Fed and the USD." 
— TDS (based on FX Street) 


Pair's Outlook 
The European common currency continues to extend its gains for the second consecutive day. The pair has maintained its Friday position, targeting the upper boundary of the broadening wedge at 121.92. It is unlikely that this level is overcome today, seeing that the pair's upward momentum in the hourly timeframe is limited by the upper Bollinger band at 121.92. Technical indicators demonstrate strong bullish signals, suggesting that the pair may avail its upward potential up to 121.30/31. However, the Euro may also trigger a U-turn in the first half of this trading week, supported by technical oscillators being in the overbought area. 

Traders' Sentiment 
Today's market sentiment is neutral, with 51 of positions being long. Meanwhile, 52 of set up orders are to acquire the European currency.
© Dukascopy Bank SA

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