EUR/JPY supported by 127.41/18

The currency pair extends the rally from 124.95—it is currently testing the rising resistance line at 129.00, but has already spiked up to 129.86, where the 55-day SMA stands. Another resistance is at 130.60; however, there will be no important obstacles until the area around 134.00 in case the monthly pivot point gives in. Still, in the longer term we are biased against the recovery, but favour more sideways movement with downside risks.

There have been no changes observed in the sentiment of market participants towards EUR/JPY since the last report. The share of longs is still at 51%, although while the overall popularity of the Euro improved, the Yen has become less preferred currency, now it is bought in 26% of all trades in its crosses.