Daily Currency Outlook: GPB/JPY and EUR/JPY

Daily Pivots: (S1) 125.51; (P) 125.85; (R1) 126.25;

No change in GBP/JPY's outlook. With 124.49 minor support intact, recent rally in GBP/JPY is still in favor to continue to 127.30 resistance, which is close to 161.8% projection of 117.29 to 122.04 from 119.58 at 127.26. At this point, we'd expect strong resistance from 50% retracement of 140.02 to 116.83 at 128.42 to finish the consolidation from 116.83 and bring down trend resumption eventually. 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) 106.39; (P) 106.70; (R1) 107.26;

EUR/JPY rises further to as high as 107.50 so far today, just inch below mentioned target of 161.8% projection of 97.03 to 102.20 from 99.24 at 107.60. Recent development argues that fall from 123.31 is finished at 97.03 with bullish convergence condition in daily MACD. Further rise is now in favor to 111.57 resistance for confirmation. On the downside, below 106.16 minor support will turn bias neutral and bring retreat before staging another rise.

In the bigger picture, the case of trend reversal in EUR/JPY is starting to build up and 97.03 should be a medium term bottom. Break of 111.57 will affirm this case and should at least push EUR/JPY for a test on 123.31 resistance. Break there will argue that whole down trend from 2008 high of 169.96 is completed and reversed. Though, failure to take out 123.31 and reversal from there will likely bring some sideway trading between 97.03/123.31 in medium term .

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