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"[The Euro] is likely to keep extending losses as there's no event that could stop its decline amid worries over Spain"
- Bank of Tokyo-Mitsubishi UFJ (based on CNBC)
Industry outlook
For now EUR/JPY is unlikely to exit down trending channel. Rallies should be halted by 107.55/91, 108.22 and 109.05, leaving almost no room for recovery. The focus therefore is on supports, which may be found at 106.71 and 106.36/04.
Traders' sentiment
The gap between the shares of bulls and bears has widened on EUR/JPY. At the moment long positions constitute 45% of the total amount of trades, while short positions form 54%.
Long position opened
The break of the short-term resistance line 108.35 would pave the way for the pair to rise up to 109.14. The clearance of the second daily resistance level would establish a new target for traders at 109.87.
Short position opened
The immediate support line is at 106.83. Should the price step even lower, it will encounter subsequent levels at 106.10 and 105.31, where recovery might start.
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