Currency Outlook, January 30, 2012: GPB/JPY and EUR/JPY

Daily Pivots: (S1) 119.86; (P) 120.73; (R1) 121.44;

Intraday bias in GBP/JPY remains neutral for the moment but another rise is still mildly in favor with 119.19 minor support intact. As noted before, rise from 117.29 is viewed as the third leg of the consolidation pattern from 116.83. Above 122.04 will bring another rise towards 127.30 resistance. Nonetheless, break of 119.19 will indicate completion of the rebound and flip bias back to the downside for 117.29 instead.

In the bigger picture, consolidation from 116.83 is still in progress and fall from 140.20, which is part of the medium term down trend from 163.05, is not ready to resume yet. While rise from 117.29 might extend further higher, we'd expect strong resistance from 50% retracement of 140.02 to 116.83 at 128.42 to finish the consolidation and bring down trend resumption. We will not consider medium term trend reversal yet before sustained trading above 128.42 fibonacci level.



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EUR/JPY Daily Outlook

Daily Pivots: (S1) 100.79; (P) 101.18; (R1) 101.77;

Intraday bias in EUR/JPY remains neutral for the moment and retreat from 102.20 temporary top could extend lower to 4 hours 55 EMA (now at 100.39) and below. Rebound from 97.03 is treated as a correction in the whole fall from 123.31. As long as 99.13 minor support holds, such rebound could extend and above 100.97 will target falling trend line resistance (now at 106.50). Nonetheless, break of 99.13 will indicate completion of such rebound and should flip bias back to the downside for retesting 97.03 low instead.

In the bigger picture, current fall from 123.31 is part of the down trend from 2008 high of 169.96 and should target 100% projection of 139.21 to 105.42 from 123.31 at 89.52. At this point, we'd anticipate strong support there to bring at least a rebound attempt, as it's close to 88.96 all time low as well as100% projection of 123.31 to 100.74 from 111.57 at 89.00. Though, a break of 111.57 resistance is needed to be the first signal of medium term reversal. Otherwise, we'll continue to stay bearish in the cross even in case of rebound.

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