EUR/JPY Daily Outlook
Daily Pivots: (S1) 126.52; (P) 127.53; (R1) 128.19;
EUR/JPY’s decline accelerates to as low as 125.09 so far today and takes out 126.61 medium term fibonacci level decisively. And, 100% projection of 137.49 to 128.94 from 133.47 at 124.92 is almost met without sign of bottoming. Intraday stays on the downside and break of 124.92 will target 161.8% projection at 119.63 next. On the upside, above 126.83 minor resistance will turn intraday bias neutral first.
In the bigger picture, bearish divergence in daily MACD and current strong downside momentum is raising the chance of medium term trend reversal. Sustained break of 38.2% retracement of 109.03 to 137.49 at 126.61 now argues that whole up trend from 109.03 has completed at 137.49 already. And, deeper decline would be seen to 61.8% retracement at 119.90 and below. This will now be the preferred case as long as 128.94 support turned resistance holds.
GBP/JPY Daily Outlook
Daily Pivots: (S1) 145.16; (P) 145.79; (R1) 146.27;
GBP/JPY drops to as low as 143.18 so far today. The solid break of 144.97 support confirms resumption of decline from 156.69. Intraday bias stays on the downside for 100% projection of 156.59 to 144.97 from 153.84 at 142.22 next. Brea there will target key cluster level at 139.29. On the upside, break of 147.04 support turned resistance is now needed to indicate short term bottoming. Otherwise, outlook will stay bearish in case of recovery.
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.
