Daily Currency Outlook: GPB/JPY, EUR/JPY: July 16, 2013

Daily Pivots: (S1) 149.85; (P) 150.55; (R1) 151.44;

Deeper fall is expected in GBP/JPY with 151.61 minor resistance intact. As noted, recovery from 147.10 has already completed at 153.01. Fall form there should target 147.10 first. 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, though, above 151.61 minor resistance will turn bias to the upside and bring another rise through 153.10.

In the bigger picture, a medium term top is in place at 156.77 on bearish divergence condition in daily MACD. A deeper pull back could be seen to 38.2% retracement of 118.82 to 156.77 at 142.27. Strong support would likely 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.
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EUR/JPY Daily Outlook

Daily Pivots: (S1) 129.61; (P) 130.16; (R1) 130.93;

Intraday bias in EUR/JPY is neutral for the moment. Above 131.11 will extend the corrective rise from 124.95. In such a case, we expect strong resistance below 133.80 to bring reversal to extend the consolidation pattern. Below 128.01 could confirm that recovery from 124.95 has completed and will turn bias to the downside for 124.95 and below.

The current development argues that the medium term uptrend 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 there, at least on the initial attempt. A break will target 61.8% retracement at 109.27. We expect another medium term rally after completing the correction, considering the five wave structure of the rise from 94.11.
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