- Yujiro Goto, Nomura (based on Business Recorder)
The European single currency set off with a sharp decline of 185 pips yesterday, amid the return of the risk-off sentiment. Nevertheless, the EUR/JPY currency pair is now likely to undergo a correction after such a rapid sell-off. The weekly S1 at 122.84 is the closest level to limit the gains, but the exchange rate could surge well above the 123.00 major level by day's end; however, with the second target at 124.20 out of reach. A negative outcome is also possible, as technical studies retain bearish signals and the immediate support area rests far from the opening price, namely around 121.20.
Bulls once again take up 59% of the market, compared to 57% on Monday. At the same time, the portion of orders to sell the European currency added 7% points, rising up to a total of 60%.