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Forex: EUR/JPY rallies on EMU PMI

The EUR/JPY is one of the main beneficiaries of the Markit PMI releases in the Eurozone that are taking down the "risk off" momentum seen earlier and providing some relief to investors. The cross is getting close to a 200-pip range, as the price was just above the 124.00 mark ahead of the European session and has already reached as high as 125.72.

The EMU PMI Composite rose from 47.2 to 48.6 in January, beating consensus of 48.2. Services PMI came in at 48.6 too. The German PMI Services is more expansionary, from 52.0 to 55.7 in January, beating consensus of 55.3.

Spain had a better than expected figure, at 47 (instead of 44.1), while Italy disappointed at 43.9 (instead of 45.8) and France came in line with consensus, at 43.6.

Commerzbank analysts believe the market is downside corrective absorb recent upside moves: "Dips lower will find initial support at the 6 week uptrend at 120.09 and this is reinforced by the 2 month uptrend at 117.98, while this holds an upside bias persists", wrote analyst Karen Jones, pointing to resistance at 127.93.

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