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EUR/JPY surges on ECB disappointment

© Dukascopy Bank SA
"We've seen time and time again that Draghi has been able to surprise the market, and if he's able to do that today then yes, I think the euro can continue to go lower. But if he's unable to do that, because expectations have just moved so far, there is the potential for a short-term rebound." 
- Ian Stannard, Morgan Stanley (based on Reuters) 

Pair's Outlook 
The European currency climbed higher for the third consecutive day on Wednesday, failing to pierce the immediate resistance cluster. Although many expected the Euro to edge lower today, the unexpected ECB's decision to extend QE until March 2017 and the refusal to increase the monthly purchases boosted the single currency, causing it to skyrocket slightly over 300 pips. Nevertheless, the third resistance cluster is likely to keep the EUR/JPY at bay and push the pair below 133. The base case scenario is a close between the second and the third resistance clusters, around 132.70. 

Traders' Sentiment

Market sentiment reached a perfect equilibrium today, with more than three quarters (78%) of all orders now to purchase the Euro.
© Dukascopy Bank SA


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