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    EUR/JPY experiences a corrective rally

    © Dukascopy Bank SA
    "The disappointing data from China is keeping alive hopes of more stimulus, and that is helping overall risk sentiment and putting the yen under pressure." 
    - Yujiro Goto, Nomura (based on Business Recorder) 

    Pair's Outlook 
    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. 

    Traders' Sentiment 
    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%.
    © Dukascopy Bank SA

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