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EUR/JPY in tight range between the support line and the monthly S1

© Dukascopy Bank SA
"There are some doubts there may be any further QE on the cards. If the ECB doesn't ease further then the sovereign divergence closes up. Hence the euro is higher." 
- Mizuho Bank Ltd. (based on Bloomberg) 


Pair's Outlook
The EUR/JPY extended its trade between the support trend-line and the immediate resistance cluster in form of the weekly PP and monthly S1 yesterday. The given cross received a boost by weak Japanese fundamentals today, allowing the pair to put the immediate resistance to the test. The single currency was unable to hold gains above the monthly S1 ever since it was breached to the downside in the beginning of 2016, therefore, this resistance is likely to hold today. Technical studies, however, retain distinctly bearish signals, suggesting a decline towards around 126.60 is possible. 

Traders' Sentiment 
Traders' sentiment remains close to equilibrium, with bulls outnumbering the bears by two percentage points.
© Dukascopy Bank SA


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