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Forex Flash: EUR/JPY, consolidation risk against continued trend gains - ANZ

FXstreet.com (Barcelona) - Tim Riddell, Head of Global Markets Research at ANZ, published a note earlier on the day noting that gains in the EUR/JPY should be harder to come by, as "the EUR/JPY’s 15 big figure gain seen since early January has met the base of the 131-141 target range stated in our 888 Trades..." the Analyst said.

Tim expands his reasoning further: "This rebound has virtually reached 50% (132.00) of the 'crisis' range seen since mid-2008. Weekly momentum indicators (RSI and Slow Stochastics are shown below) have been displaying distinct divergence on recent highs. The risk/reward scenario is now more balanced in terms of consolidation risk against continued trend gains."

Tim adds: "This week’s slip back below 128.80 suggests that further consolidation is likely to develop into mid-year. Consequently, we take profit on this 888 trade (initiated in the 115-116 area) but will look to re-enter into deeper corrective pullbacks"

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