- Kit Juckes, Societe Generale (based on CNBC)
Pair's Outlook On
Monday, the European currency managed to appreciated up to 137.80, but failed to maintain trade above the strong resistance cluster. As a result, trade closed with the EUR/JPY cross edging closer to the weekly PP. Technical studies are now showing distinctly bullish signs again, but we expect the Euro to rebound from the weekly pivot point and edge higher. The 20 and 200 day SMAs are now forming a cluster, which should limit the gains; however, the pair is likely to settle around the 136.00 psychological level.
Market sentiment remains bearish, with 52% of traders holding short positions. The portion of purchase commands now takes up exactly three quarters of the market, compared to 76% yesterday.