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EUR/JPY closing the bullish gap

FXStreet (Barcelona) - EUR/JPY is trading at 137.04, down -0.01% on the day, having posted a daily high at 137.39 and low at 136.95.

EUR/JPY is recovering slightly from profits cashed in on the offer after the opening bids were sold into. The pair was subject to trades taking place on the back of the weekend news and the relief that the European banking sector is in reasonably good shape in respect of the ECB’s stress test standards. Most key is that none of Europe’s major banks failed the test while only 13 banks need to raise a cumulative capital shortfall of just EUR9.47bn, a sum that is actually equivalent to less than 0.1% of nominal annual GDP.

EUR/JPY at the top of its game?

EUR/JPY has been rising for two and a bit years from sub 100.00. There has been much emphases on a stronger greenback again and USD/JPY is back in focus with a bullish bias. The EUR/USD is tipped to continue lower in this strong bear trend and current environment. The Euro has potential to fall further than the USD/JPY might be able to accomplish on the upside given its recent advances in progress that would be then equating to a weaker EUR/JPY. Patrick Legland, head of global research at Societe Generale explained that taking an upbeat (i.e. consensus) view of the global economy, the most plausible scenario is that USD/JPY gets stuck at 110 and EUR/USD falls to 1.05, while he explained that a serious re-emergence of market stress would see the latter rate reached more easily, with USD/JPY falling back to 100-105.00.

EUR/JPY noteworthy levels

Spot is presently trading at 137.04, and next resistance can be seen at 137.27 (Daily Classic R1) and 137.38. Support below can be found at 136.95 (Daily Low), 136.89 (Hourly 20 EMA), 136.88 (Daily 20 SMA) and 136.67 (Daily Classic S1).

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