EUR/JPY Daily Outlook
Daily Pivots: (S1) 126.47; (P) 127.09; (R1) 127.85;
EUR/JPY’s recovery from 124.61 is still in progress. While further rise cannot be ruled out, upside should be limited by 128.94 support turned resistance to bring fall resumption. On the downside, below 126.29 minor support will bring retest of 124.61 first. Break will resume whole fall from 137.49 and target next medium term fibonacci level at 119.90.
In the bigger picture, the case of medium term trend reversal continues to build up. That is rise from 109.03 (2016 low) could have completed at 137.49 already. This is supported by bearish divergence in daily MACD current downside acceleration, as well as the break of 38.2% retracement of 109.03 to 137.49 at 126.61. Deeper decline should be seen to 61.8% retracement at 119.90 and below. This will be the preferred case as long as 128.94 support turned resistance holds.
GBP/JPY Daily Outlook
Daily Pivots: (S1) 144.07; (P) 144.70; (R1) 145.27;
Intraday bias in GBP/JPY remains neutral as consolidation from 143.18 is still in progress. Further recovery could be seen. But upside should be limited by 147.04 support turned resistance to bring decline resumption. Break of 143.18 will extend the fall from 159.59 to 100% projection of 156.59 to 144.97 from 153.84 at 142.22 next.
In the bigger picture, for now, we’re treating price actions from 156.59 as a corrective move. Therefore, while deeper fall is expected, strong support should be seen above 139.29 cluster support (50% retracement of 122.36 to 156.59 at 139.47) to contain downside and bring rebound. There is still prospect of extending the rise from 122.36. However, considering that GBP/JPY failed to sustain above 55 month EMA (now at 153.94), firm break of 139.29 will confirm trend reversal and turn outlook bearish.
