Daily Currency Outlook: GPB/JPY and EUR/JPY

Daily Pivots: (S1) 125.41; (P) 126.03; (R1) 126.42;

Another rise remains in favor in GBP/JPY with 124.49 minor support intact. Current rally could extend to 127.30 resistance, which is close to 161.8% projection of 117.29 to 122.04 from 119.58 at 127.26. At noted before, we're treating rebound from 117.29 as the third leg of consolidation pattern from 116.83. Hence, we'd expect upside to be limited by 50% retracement of 140.02 to 116.83 at 128.42 to finish the consolidation and bring down trend resumption. Below 124.49 will flip bias back to the downside. Further break of 122.04 support will confirm near term reversal and target a test on 116.82 low next.

In the bigger picture, the choppy decline from 163.05 is viewed as part of the down trend from 251.09 and there is no clear sign of reversal yet. Such down trend is expected to continue after consolidation pattern from 116.83 finishes and target 110 psychological next. However, sustained break of above mentioned 128.42 will raise the odds that GBP/JPY has bottomed in medium term and will turn focus back to 140.20 resistance for confirmation.

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EUR/JPY Daily Outlook

Daily Pivots: (S1) 105.05; (P) 105.53; (R1) 106.01;

EUR/JPY lost some upside momentum with 4 hours MACD crossed below signal line but with 104.65 minor support intact, intraday bias remains mildly on the upside. Current rally from 97.03 is expected to continue towards 161.8% projection of 97.03 to 102.20 from 99.24 at 107.60. Note that the break of the falling trend line resistance (from 123.31) argues that recent fall is finished, with bullish convergence condition in daily MACD. Break of 107.60 will target 111.57 resistance. On the downside, below 104.65 minor support will turn bias neutral and bring consolidations. But another rise will remain in favor as long as 101.92 support holds.

In the bigger picture, at this point, there is no clear sign of trend reversal in EUR/JPY yet. Fall from 123.31, which is part of the down trend from 2008 high of 169.96 is still expected to continue after corrective rebound from 97.03 finishes. Next target is 100% projection of 139.21 to 105.42 from 123.31 at 89.52. But in that case, we'd anticipate strong support there to bring at least a rebound attempt, as it's close to 88.96 all time low. However, sustained trading above the above mentioned trend line will be the first signal of reversal on bullish convergence condition in daily MACD. Further break of 111.57 should confirm medium term bottoming and target 123.31 resistance and above.

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