Currency Outlook: GPB/JPY And EUR/JPY: August 22, 2013

Daily Pivots: (S1) 152.16; (P) 152.90; (R1) 153.68;

With 151.19 minor support intact, further rise could be seen as consolidation from 147.10 continues. But, the pattern from 147.10 is viewed as the second leg of the correction from 156.77 high. Hence, strong resistance should be seen below 156.77 to bring reversal to start the third leg. Below 151.19 minor support will turn bias back to the downside for 147.10/61 support zone first.

In the bigger picture, a medium term top is in place at 156.77 on bearish divergence condition in daily MACD. Deeper pull back could be seen to 38.2% retracement of 118.82 to 156.77 at 142.27. Strong support would likely be seen at 140.37 to bring rebound, at least on first attempt. Overall, we'd still expect whole rise from 116.83 medium term bottom to resume later to 163.05 resistance and above after completing the correction.


GBP/JPY H4" width="600" height="600">
GBP/JPY" width="600" height="600">


EUR/JPY

Daily Pivots: (S1) 130.19; (P) 130.60; (R1) 130.87;

EUR/JPY's rebound from 127.96 resumed and intraday bias and is back on the upside for 131.96 support. A break there will likely extend the choppy rebound from 124.95 to above 132.73. But we'd expect strong resistance below 133.80 to bring another fall to extend the consolidation from there. Meanwhile, below 129.28 minor support would bring deeper fall through 127.96 towards 124.95 support.

In the bigger picture, current development argues that the medium term up trend from 94.11 has topped out at 133.80 on bearish divergence condition in daily MACD. Consolidation from there could extend with another fall to target 119.10 cluster support (38.2% retracement of 94.11 to 133.80 at 118.63). Strong support would be seen there, at least on initial attempt. But, break will target 61.8% retracement at 109.27. Nonetheless, considering the five wave structure of the rise from 94.11, we'd expect another medium term rally after completing the correction.


EUR/JPY H4" width="600" height="600">
EUR/JPY" width="600" height="600">