Daily Currency Outlook: GPB/JPY and EUR/JPY

Daily Pivots: (S1) 131.88; (P) 132.68; (R1) 133.18;

Current development suggests that a short term top is in place in GBP/JPY at 133.48 on bullish convergence condition in 4 hours MACD. Intraday bias is mildly on the downside for deeper retreat. But downside is expected to be contained by 126.54/130.13 support zone. Above 133.48 will extend the rise form 117.29 to retest 140.02 key resistance level.

In the bigger picture, recent development argues that choppy decline from 163.05 is completed at 116.83 already. Focus remains on 140.02 and sustained break there will confirm this bullish case. 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 resistance next. Though, failure below 140.02 resistance will indicate that GBP/JPY is merely in sideway trading pattern between 116.83 and 140.02.
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EUR/JPY Daily Outlook

Daily Pivots: (S1) 109.70; (P) 110.56; (R1) 110.09; More

Today's decline in EUR/JPY suggests that a short term top is formed at 111.43 on bearish divergence condition in 4 hours MACD, just ahead of 111.57 resistance. Intraday bias is mildly on the downside for pull back. Though, downside is expected to be contained by 105.64 support and bring another rally. Overall outlook is unchanged. Fall from 123.31 has completed at 97.03 on bullish convergence condition in daily MACD. Decisive break of 111.57 will confirm 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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