EUR/JPY at risk of closing down by three figures

The EUR/JPY cross behaved in accordance with expectations yesterday, as the exchange rate stabilised not only above the 126.00 major level, but also above the immediate resistance in face of the monthly PP. Nevertheless, the Euro now risks erasing all previous seven-day gains, as the BoJ unexpected decision today to leave the interest rate policy unchanged sparked Yen buying spree. The given pair is now on the edge of breaching the third support area, namely the weekly S1 just under the 123.00 mark. Price is expected to close around 123.50, unless bears keep pushing the Euro under the weekly S1, in which case we might see a drop even beyond 122.00.

Although the SWFX sentiment remains bullish, the number of long positions decreased to 58% from 74% over the past 24 hours.