- Morgan Stanley (based on Reuters)
The European currency declined against the Japanese Yen yesterday, but found support in form of the 136.00 psychological level. The strong cluster around 135.55 keeps providing substantial support, while the group of significant levels around 137.00 are to limit the gains. Although a rebound is expected to take place today, the weekly R1 at 136.70 could still prevent the EUR/JPY cross from edging higher. Technical studies are now giving bullish signals, suggesting the Euro is to climb against the Yen by day's end.
Market sentiment is barely bullish, as 51% of traders are now long the Euro (previously 52%). The number of purchase orders also declined, from 65 to 61%.