Daily Currency Outlook: GPB/JPY and EUR/JPY

Daily Pivots: (S1) 125.94; (P) 127.71; (R1) 128.89;

GBP/JPY is pressing mentioned 126.68 for the moment. Break there will confirm short term topping and deeper pull back could be seen to 55 days EMA (now at 123.72). On the upside, above 130.13 will confirm rally resumption and should target 61.8% retracement of 140.02 to 116.83 at 131.16. Break 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.
GBP/JPY H4" title="GBP/JPY H4" width="669" height="564">

GBP/JPY" title="GBP/JPY" width="676" height="570">
EUR/JPY Daily Outlook

Daily Pivots: (S1) 107.12; (P) 107.57; (R1) 108.23;

EUR/JPY dipped to as low as 105.64 and is touching 38.2% retracement of 99.24 to 109.83 at 105.78. At this point, we'd continue to expect strong support from this fibo level to contain downside. Above 107.20 minor resistance will flip bias back to the upside for 109.83 and above. Though, sustained trading below 105.87 will bring deeper pull back to near term trend line support (now at 103.89). Overall, we're favoring the case that fall from 123.31 has finished on bullish convergence condition in daily MACD and we's stay cautiously bullish as long as 102.20 support holds.

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.

EUR/JPY H4" title="EUR/JPY H4" width="648" height="546">
EUR/JPY" title="EUR/JPY" width="648" height="546">