Daily Currency Outlook: GPB/JPY And EUR/JPY

Daily Pivots: (S1) 122.75; (P) 123.45; (R1) 123.98;

GBP/JPY rebounded strongly and the development suggests that corrective rise from 118.82 is still in progress. Intraday bias is mildly on the upside for 125.82 and above. But after all, we'd expect strong resistance from 127.10 to conclude the corrective rally, on bearish divergence condition in 4 hours MACD. Break of 122..86 minor support will now flip bias back to the downside for retesting 118.82 support 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, however, above 127.01 will firstly indicate that fall from 133.48 is finished. Further, break of 133.48 should then confirm medium term reversal.

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EUR/JPY Daily Outlook

Daily Pivots: (S1) 98.30; (P) 98.88; (R1) 99.45;

The breach of 98.53 minor support was brief and EUR/JPY quickly recovered. Indeed, the strong of the rebound and bring of 99.96 minor resistance indicates that whole corrective rise from 95.64 is still in progress. Intraday bias is mildly on the upside for 101.62 and above. Nonetheless, we're still expecting strong resistance from 61.8% retracement of 108.00 to 95.64 at 103.27 to finish the correction, on bearish divergence condition in 4 hours MACD. On the downside, break of 98.32 minor support will revive that case that rise from 95.64 is completed and bring retest of this low.

In the bigger picture, the larger down trend from 2008 high of 169.96 is still in progress and could extend further lower towards 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 above 88.96 to contain downside, form a major bottom and bring reversal. So, focus will be on reversal signal in case of another decline. Meanwhile, break of 104.61 will be the first signal of reversal while further break of 111.43 should confirm.

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