Daily Currency Outlook: GPB/JPY, EUR/JPY - March 18, 2013

Daily Pivots: (S1) 143.25; (P) 144.56; (R1) 145.31;

The GBP/JPY pair dropped sharply today, focus is back to 142.00 minor support. A break will indicate that rebound from 137.87 has completed at 145.85. In that case, the consolidation pattern from 147.97 should have started the third leg for 38.2% retracement of 118.82 to 147.97 at 136.83 and below. In the event of another rise, a firm break of 147.97 is needed to confirm resumption of recent rally. Otherwise, the risk of another fall remains as consolidation from 147.97 would continue.

In the bigger picture, medium term fall from 163.05 has already completed at 116.83 . It's a bit early to conclude reversal of the long term down trend from 251.09 (2007 high). A rise from 116.83 should at least be a move at the same degree as fall from 163.05. Medium term rise is now expected back to 163.05. We'll stay bullish as long as 133.48 resistance turned support holds.
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EUR/JPY Daily Outlook

Daily Pivots: (S1) 123.94; (P) 124.86; (R1) 125.53;

EUR/JPY drops sharply as the week starts and the strong break o 123.79 minor support indicates that rebound from 118.71 is already finished at 126.03. Intraday bias is back on the downside. Fall from 126.03 is viewed as the third leg of the consolidation pattern from 127.70 and deeper decline is expected back to 118.71 support and below. At this point, we'd expect strong support from 117.04 (38.2% retracement of 100.32 to 127.70 at 117.24) to complete the consolidation and bring rally resumption eventually.

In the bigger picture, whole down trend from 169.96 (2008 high) has already completed at 94.11, on bullish convergence condition in weekly MACD. Rise from there isn't finished yet and is expected to continue to 50% retracement of 169.96 to 94.11 at 132.03 next. Eventually, such a rise would likely extend to 139.21 resistance and above. We'll stay bullish as long as 111.43 resistance turned support holds.
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