- Angus Nicholson (based on The Wall Street Journal)
As was anticipated, the European single currency edged lower against the Japanese Yen on Friday. The EUR/JPY currency pair now risks breaking the ascending channel pattern, as the immediate area to limit the hold the losses in face of the weekly PP appears to be providing little support. The next obstacle is the 126.88 point—where the 55-day SMA coincides with the ascending channel's lower border. In case this demand area is pierced, the next target will then be the cluster circa 126.20, represented by the 20-day SMA, the weekly S1 and the monthly PP. However, technical studies insists that the cross might still recover and edge back up, closer towards the 128.00 mark.
Market sentiment is strongly bullish, as 67% of all open positions are long. The portion of buy orders, however, decline from 67 to 35%.