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EUR/JPY calms down before ECB meeting

© Dukascopy Bank SA
"Regardless of the data, the ECB cannot afford to disappoint on Thursday. The stage has been set for (ECB chief Mario) Draghi to take action." 
- UniCredit SpA (based on Business Recorder) 

Pair's Outlook 
The Euro extended its recovery on Tuesday, slightly beating expectations and closing trade at 130.62. Today the EUR/JPY faces a stronger resistance than yesterday, namely the weekly R1 and the monthly PP, which are forming a cluster just under the major level of 131.00. If the cross manages to pierce the given resistance, we should then see a rally towards 131.30, where the 20-day SMA and the channel's upper border could trigger profit taking. Technical studies, however, suggest the given pair could retreat towards the weekly PP even by the end of today. 

Traders' Sentiment 
Nearly three quarters (74%) of all positions are now long, whereas the share of orders to purchase the Euro declined from 53 to 42%.
© Dukascopy Bank SA

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