- Ian Stannard, Morgan Stanley (based on Reuters)
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.
Market sentiment reached a perfect equilibrium today, with more than three quarters (78%) of all orders now to purchase the Euro.