Daily Currency Outlook: GPB/JPY, EUR/JPY: July 05, 2013

Daily Pivots: (S1) 149.74; (P) 151.29; (R1) 152.31;

Current development suggest the rebound form 147.10 completed at 153.01. It also suggested that correction from 156.77 was still in progress and just started another falling leg. Intraday bias was back on the downside for 149.24 first. A break will pave the way for a new low below 147.10.

A medium term top was in place at 156.77 on bearish divergence condition in the daily MACD. A deeper pull back could be seen to the 38.2% retracement of 118.82 to 156.77 at 142.27. Strong support was likely at 140.37 to bring rebound, at least on first attempt. We expected whole rise from 116.83 medium term bottom to resume later to 163.05 resistance and above, after completing the correction.
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EUR/JPY Daily Outlook

Daily Pivots: (S1) 128.59; (P) 129.39; (R1) 129.96;

As noted, rebound from 124.95 could have been finished at 131.11 and was a corrective move. The development argued that consolidation pattern from 133.80 was still in progress, with a fall from 131.11 as the third leg. Intraday bias remained mildly on the downside for 126.57 support first. A break will target 124.95 and below. Above 131.11 brought another rally to extend the rebound from 124.95. Such rebound could only be the second leg of the consolidation pattern from 133.80. We were cautious on reversal from 131.29/133.80.

The development argued that the medium term up trend from 94.11 topped out at 133.80 on bearish divergence condition in the daily MACD. Such a correction could have extended with another fall to target 119.10 cluster support (38.2% retracement of 94.11 to 133.80 at 118.63). Strong support was seen there, at least on initial attempt. A break could have targeted 61.8% retracement at 109.27. Considering the five wave structure of the rise from 94.11, we expected another medium term rally after completing the correction.
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