- National Australia Bank (based on Reuters)
The EUR/JPY currency pair overperformed on Tuesday, as it managed to reach the 124.00 level and close trade nearby. The main reason for such a strong 135-pip rally was the return of risk-on sentiment, which could also trigger a sufficient surge today and, thus, erase Monday's losses completely. The only obstacle on the Euro's path is the weekly PP at 124.20, a breach of which is also likely to open the door for the 125.00 level to be retaken, as the second closest resistance is located around the 126.00 level. However, technical indicators shifted from bearish to distinctly bearish today, suggesting that the exchange rate might fall back under 123.00 and even pierce the support at 122.84.
Bulls keep pushing forward, as 64% of traders are now long the Euro (previously 59%). The share of sell orders increased from 60 to 72%.