Daily Currency Outlook: GPB/JPY, EUR/JPY: July 15, 2013

Daily Pivots: (S1) 149.31; (P) 149.99; (R1) 150.56;

Deeper fall is expected in the GBP/JPY with the 151.61 minor resistance intact. As noted, recovery from 147.10 has already completed at 153.01. Fall from there should target 147.10 first. A break will resume whole corrective fall from 156.77 towards 38.2%, retracement of 118.82 to 156.77 at 142.27. On the upside, above 151.61 minor resistance will turn bias to the upside and bring another rise through 153.10.

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 will probably be seen at 140.37 to bring rebound, at least on the first attempt. We still expect whole rise from 116.83 medium term bottom to resume later to 163.05 resistance and above after completing the correction.


EUR/JPY Daily Outlook

Daily Pivots: (S1) 129.07; (P) 129.50; (R1) 130.11;

We're still favoring the case that 124.95 has already finished, and that it was a corrective move. Fall from 131.11 is possibly the third leg of the correction from 133.80. Below 128.01 will target 126.57 support. Break will confirm this case and should target 124.95 and below. On the upside, above 131.11 will bring stronger rise back towards 133.80 instead.

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. Correction 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 could be seen, at least on the initial attempt. A break will target 61.8% retracement at 109.27. Considering the five wave structure of the rise from 94.11, we expect another medium term rally after completing the correction.