- Wakabayashi FX Associates Co. (based on Bloomberg)
The European single currency failed to post gains on Tuesday, as the exchange rate slipped back towards the 122.00 level and even crossed it. Technical indicators are no longer giving bearish signals, but the Euro is likely to prolong its bearish development against the Japanese Yen. The 122.00 major level, along with the weekly PP, is now weighing on the EUR/JPY cross, preventing it from edging higher, while the monthly S1 is the closest support, located at 121.64. The monthly S1 proved to be unreliable previously, therefore, we could expect a drop towards the 121.00 mark, where the falling wedge's support line coincides with the Bollinger band.
Bulls remain in control, taking up 56% of the market (previously 53%). At the same time, the share of sell orders increased from 35 to 67%.