- Wakabayashi FX Associates Co. (based on Bloomberg)
Even a weak reading of Germany Factory Orders yesterday was insufficient to halt the EUR/JPY's rally. The 121.00 psychological level provided enough support for a solid rebound, which led the cross even above the 122.00 mark. The Euro is likely to find support in face of the weekly PP today, located at 122.04, while the nearest resistance is to be met only circa 123.10, represented by the 20-day SMA, the weekly R1 and the monthly PP. Technical studies are now giving bearish signals in all timeframes, opposed to bullish daily ones yesterday. However, despite bearish signs, a bullish development is still more probable, as no reachable supply is to reverse the current recovery trend.
Although not as strong as yesterday, but traders' sentiment remains bullish at 53%. There are also 65% of orders to purchase the Euro.