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Forex: EUR/JPY holds above 128.30

FXstreet.com (Barcelona) - The EUR/JPY is trading calmly at 128.30 support (-0.63% on the day) after the early European morning drop below the 129.00 handle and a low at 128.00 mark. Investors are now awaiting the US GDP Q1 preliminary report, with expectations that annualized growth rises from 0.4% to 3.0%. Reuters/Michigan consumer sentiment is also expected to improve, from 72.3 to 73.2 in April.

We expect the economic recovery to start the year on a much firmer footing than it ended 2012. And even in the midst of ever-tightening fiscal policy and an unsupportive global environment, the economy is expected to boast a very respectable 3.0% Q/Q advance in Q1, up significantly from the disappointing 0.4% Q/Q advance recorded the previous quarter”, wrote TD Securities analyst Jacqui Douglas. Today’s data should be helpful to price in expectations ahead of next week’s FOMC meeting.

The BoJ announced a unanimous vote to “conduct money market operations so that the monetary base will increase at an annual pace of about 60-70 trillion yen” in order to double the monetary base in 2 years, the pair accelerated the downside to 98.23 low. The central bank expects +1.4% in FY2014 excluding sales tax and 1.9% in 2015, while 0.7% in 2013. This comes as a big upside move from the previous outlook. The rebound reached 98.80 area.

Mataf.net analysts point to resistance at 128.85, 129.40 and 129.90. On the downside, supports might be found at 128.00, 127.55 and 127.15.

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