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Forex: EUR/JPY peaks at 125.59 and then tests 124.00 ground

FXstreet.com (Barcelona) - Following the BoJ decision yesterday, the EUR/JPY soared from 119.28 and peaked at 125.59 high during today’s Asian session, totaling more than 600 pips gained. However, ahead of the European morning, the EUR/JPY retraced to test the 124.00 ground and is now limited at 124.30/60.

Eurostat revealed the first reading for GDP Q1 2013, coming at -0.6%. EMU retail sales contracted by -0.3% in February, more than the -0.2% expected and after a +1.2% rise in the previous month. The annualized figure rebounded from -1.9% (revised from -1.3%) to -1.4%, while market consensus was pointing to -1.8%. German factory orders are still due and market consensus bets a 1.2% monthly rise in February, with an annualized rebound from -2.5% to -1.5%.

As expected, the 10-year JGB saw an increased demand that took it to record low yields during today’s session. Currently, each bond pays 0.44% on the secondary market. The preliminary release of Japan’s leading economic index in February rose from 95.0 to 97.5, while the coincident index came in higher from 91.6 to 92.1.

“EUR/JPY has seen a massive rebound from the 118.74 February low, the rally has virtually reached the 126.03 March high and we suspect that we may see some slight consolidation intraday ahead of further gains”, wrote Commerzbank analyst Karen Jones, pointing to support at 124.07/123.13. The 127.71 February high could be back on the map once the 126.03 resistance is breached.

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