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EUR/JPY stuck between 138 and 139

© Dukascopy Bank SA
"It is all about Bund/Treasury spreads narrowing ... which is driving the euro." 
- CIBC World Markets (based on Reuters) 

Pair's Outlook 
The resistance cluster failed top stop the rally at 137.60, as the European currency skyrocketed against the Yen yesterday. The session high almost reached the 139 level, but the weekly R2 still pushed the EUR/JPY cross down to 138.30. Although technical indicators retain mixed signals, we still expect the Euro to surge again. The nearest resistance rests at 138.59, represented by the weekly R2, but a hike over 139 is not out of the question. Moreover, from below the single currency is supported by the Bollinger band, which should not let the pair to decline. 

Traders' Sentiment 
Bulls broke out of the equilibrium, as 58% of traders now hold long positions. The portion of purchase orders slid form 75 to 60%.
© Dukascopy Bank SA

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