EUR/JPY denied by 120.40

A rally from 115.00, commenced on Jan 9, appears to be overextended and requires a bearish correction prior to its continuation. However, a rising support line, currently at 117.90/39, that connects minima since Nov 14, should stay intact for the bullish outlook to remain valid. Otherwise, it will imply emergence of a dip down to 112.00/111.43—Mar 21 high.

The share of short positions has slightly increased, up to 64%, enhancing the dominance of bears over bulls, as the market is becoming increasingly convinced that the bearish correction is to prolong. As for the orders, a majority (64%) of them is to buy the Euro and 36% are to sell it against the Japanese Yen.