Daily Currency Outlook: GPB/JPY and EUR/JPY

Daily Pivots: (S1) 128.89; (P) 129.24; (R1) 129.73;

As noted before, with 126.68 minor support intact, there is no clear sign of topping in GBP/JPY yet and another rally could be seen. But GBP/JPY has been clearly losing upside momentum with bearish divergence condition in 4 hours MACD. Hence even in case of another rise, strong resistance would likely be seen at 61.8% retracement of 140.02 to 116.83 at 131.16 to limit upside at first attempt and bring consolidations before staging another rally. Meanwhile, break of 126.68 support will indicate short term topping and bring deeper pull back. Overall, Overall, 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 indicate 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) 107.49; (P) 108.12; (R1) 108.94;

Intraday bias in EUR/JPY remains neutral for the moment and more consolidations could be seen below 109.83 short term top. But downside is expected to be contained by 38.2% retracement of 99.24 to 109.83 at 105.78 and bring rally resumption. 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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