[LONDON, 13.05GMT April 10] EUR/JPY a main driver of EUR/USD strength over recent sessions and helping the pair through 1.3100 in NY Tuesday. Gains extended to 1.3122 in early London and has now almost broken the back of a 2mth bear trend. This sixth session of solid EUR demand now targets the 1.3145-55 area where we see strong technical resistance. Bollinger top comes in at 1.3149, the 100dma at 1.3147 and the 55dma at 1.3153. There is also the March high at 1.3134 to contend with prior, while alleged 1.3150 barriers are also in play (not large). Initial tests on 1.3150 likely to run in to sellers, with plenty of offers scattered between 1.3130-50. A close above 1.3160 however, would signal a potential upside extension and as such, holds a rack of stops, many relating to pre 1.3150 offers. Initial rejections still likely to attract dip buyers, with bids seen in the 1.3070 area. NB- implied vols are at pre Cyprus lows, although buyers are coming back to take advantage of low premiums, especially for downside strikes.
Trade smaller than rational because the market is irrational...