Daily Pivots: (S1) 122.51; (P) 123.42; (R1) 124.54
No change in GBP/JPY's outlook. Rebound from 118.82 is viewed as a correction only. Hence, even in the case of another rise, upside should be limited by 124.64 resistance and bring fall resumption eventually. Below 121.33 minor support should flip bias to the downside and send GBP/JPY through 118.82 to 116.83/117.29 support zone next.
In the bigger picture, the corrective structure of the rebound from 116.83 to 133.48 indicates that down trend from 2007 high of 251.09 is not finished yet. Break of 116.83 will resume such down trend and target 110 psychological level first. Break will pave the way to the more important 100 level and possibly below. On the upside, break of 133.48 is needed to indicate medium term reversal. Otherwise, we'll stay bearish even in case of strong recovery.
EUR/JPY
Daily Pivots: (S1) 99.40; (P) 100.01; (R1) 100.61
Despite breaching mentioned 100.20 resistance (38.2% retracement of 108.00 to 95.64 at 100.36), EUR/JPY failed to sustain above and retreated sharply. With four hours MACD crossed below signal line, intraday bias is turned neutral. Such rebound from 95.64 is still viewed as a correction only, below 98.23 minor support should flip bias back to the downside and send EUR/JPY through 95.64 to next projection level at 95.18 and then 90 psychological level. We'll stay bearish as long as EUR/JPY stay above mentioned 100.20.
In the bigger picture, break of 97.03 support last week confirmed resumption of the larger down trend from 2008 high of 169.96. Current fall could target 61.8% projection of 123.31 to 97.03 from 111.43 at 95.18 and possibly further to 90 psychological level. However, as we're favoring the case that pattern from 139.21 is a falling wedge with bullish convergence condition in weekly MACD. Fall from 111.43 should be the last leg in such pattern. Hence, we'll expect strong support below 95.18 to contain downside, form a major bottom and bring reversal. So, focus will be on reversal signal below 95.18.
