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– Credit Suisse (based on Reuters)
Pair's Outlook
Wednesday ended with the EUR/JPY cross experiencing a rather sharp decline, despite the initial bullish reaction, triggered by the BoJ's announcement. The Euro is now likely to undergo a correction after such a drop and ignore the immediate resistance area, which is located around 112.70. The next target is the cluster circa 113.35, formed by the monthly and the weekly S1s, but it is doubtful that bulls will manage to strengthen the Euro that much. This week's daily technical indicators proved to be unreliable, thus, even though they retain mixed signals, a bullish development is most likely already determined.
Traders' Sentiment
Today 66% of traders hold long positions, compared to 68% on Wednesday. At the same time, the number of orders to sell the European currency surged from 38 to 69%.
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