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Forex: EUR/JPY drowns to 123.32 low

FXstreet.com (Barcelona) - The Yen is rebounding once again from its lows after the awaited BoJ meeting and inflation outlook and the EUR/JPY is suffering the consequence. The cross failed to hold the 130.00 handle on Monday, and after some ranging throughout the week, the EUR/JPY is finally falling across the chart. From 129.38 high, the cross has already lost 200 pips down to 127.32 low once the economic calendar became empty.

The central bank announced a unanimous vote of 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 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.

Annualized GDP Q1 had a big improvement from Q4, from 0.4% to 2.5% growth, but came in lower than market consensus of 3.0%. GDP price also failed to meet expectations: up from 1.0% to 1.2%, below 1.4% consensus. The US economic calendar also presented flash Personal Consumption Expenditures, which rising pace eased from 1.6% to 0.9% (consensus of 1.1%) in Q1 (QoQ), and its Core data, that rose from 1.0% to 1.2% as expected. Consumer spending and imports rose 3.2% and 5.4%, respectively. US Reuters/Michigan consumer sentiment is due shortly and is expected to rise from 72.3 to 73.2 in April.

The April report of Reuters/Michigan Consumer Sentiment index points to a surprising rise from 72.3 to 76.4, beating the market consensus of 73.2.

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

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