Daily Currency Outlook: GPB/JPY and EUR/JPY

Daily Pivots: (S1) 126.41; (P) 128.07; (R1) 129.20;

A temporary top is in place in GBP/JPY at 129.65 and intraday bias is turned neutral for the moment. Some consolidations would be seen. But downside is expected to be contained above 125.46 support and bring another rise. Above 129.65 will target 61.8% retracement of 140.02 to 116.83 at 131.16 first. As noted before, the decline from 140.02 should have finished at 116.83 already. Break of 131.16 fibo level will target a test on 140.02 next.

In the bigger picture, the choppy decline from 163.05 is viewed as part of the down trend from 251.09. Current development is starting to suggest that such fall is finished. Focus is now turned to 140.02 key resistance. Sustained break there will firstly indication completion of fall from 163.05. More importantly, this will also signal completion of the whole down trend from 2007 high of 251.09. In such case, stronger rise should be seen back to retest on 163.05.

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EUR/JPY Daily Outlook

Daily Pivots: (S1) 106.81; (P) 108.38; (R1) 109.57;

Intraday bias in EUR/JPY remains neutral for the moment and more consolidation could be seen below 109.83 temporary top. Another fall might be seen but downside should be contained by 4 hours 55 EMA (now at 106.01) and bring another rise. Above 109.83 will extend the rally from 97.03 to 111.57 resistance. As noted before, fall from 123.31 has likely finished on bullish convergence condition in daily MACD. Break of 111.57 will affirm this bullish case and target 123.31 key resistance next.

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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