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EUR/JPY undergoes a correction

© Dukascopy Bank SA
"We expect headline news to drive euro/crosses this week and volatility remaining elevated." 
- ING (based on CNBC) 


Pair's Outlook 
The European currency skyrocketed on Monday in attempt to reach the exchange rate, where the gap occurred. Moreover, the three closest resistance levels was breached, as the EUR/JPY added 360 pips and reached a daily high of 138.14. A correction is likely to take place after such a substantial rally, with the 200-day SMA limiting the losses, while the cluster around 136.31 could provide a stronger support. Meanwhile, technical indicators keep showing mixed signs, unable to conform the scenario. 

Traders' Sentiment 
Market sentiment remains unchanged, with only 47% of positions being long. The number of buy orders, on the other hand, lost nine percentage points. The commands now take up 26% of the market.
© Dukascopy Bank SA


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