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    EUR/JPY sets eye on the down-trend

    © Dukascopy Bank SA
    "The yen is already weak enough, while the euro has scope for further devaluation, the Bank of Japan faces increasingly limited easing options." 
    - BAML (based on Bloomberg) 

    Pair's Outlook 
    The European currency decline a lot more than anticipated, as it reached the third support level at 128.65 yesterday. Although trade closed at 129.33, the target support was still pierced, leaving room for more weakness today. The EUR/JPY is likely to suffer another gradual decline, edging closer to the support trend-line currently at 127.58, which is also bolstered by the weekly R3. A retest of the down-trend is possible, but the cross is still expected to stabilise higher around the second support level, namely the monthly S1. 

    Traders' Sentiment  
    Bulls and bears broke out of equilibrium, as 51% of traders now hold short positions and the remaining 49% - long. At the same time, the number of orders to buy the Euro remains unchanged at 52%.
    © Dukascopy Bank SA

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