- Credit Agricole (based on Reuters)
Friday ended with the European currency slumping against the Japanese Yen, therefore, breaching the falling wedge pattern to the downside, rather than the upside. As a result, more bearish momentum is likely to follow, triggered by the return of risk aversion, thus, boosting demand for safe-haven Yen. The monthly S2 and the Bollinger band represent immediate support around the 120.00 major level, but we pair is on the verge of violating the second support at 119.27, namely the weekly S1. In case the weekly S1 fails to limit the losses, attention should be paid to the March 2013 low, located at 119.12.
Bulls grew stronger over the weekend, now taking up 57% of the market, compared to 55% on Friday. At the same time, the number of orders to sell the Euro increased from 45 to 71%.