Daily Currency Outlook: GPB/JPY And EUR/JPY

Daily Pivots: (S1) 124.07; (P) 124.50; (R1) 125.27;

Intraday bias in GBP/JPY remains on the upside for the moment and current rise should target 125.82 next. Break will confirm resumption of rebound from 118.82 and will target 100% projection of 118.82 to 125.82 from 120.82 at 172.82 next. On the downside, though, below 123.30 minor support will mix up the near term outlook and turn bias neutral again.

In the bigger picture, there was so far no impulsive upside move after GBP/JPY formed a medium term bottom at 116.83. On the other hand, there was no sustainable selling neither. The development argues that even though there is no clear sign of trend reversal in GBP/JPY, it's more likely engaging in sideway consolidations, which corrects fall from 163.05. That is, we'd probably see more range trading between 116.83 and 140.02 (50% retracement of 163.05 to 116.83 at 139.94) ahead, before an eventual downside breakout.
GBP/JPY H4" title="GBP/JPY H4" width="736" height="472">

GBP/JPY" title="GBP/JPY" width="736" height="472">
EUR/JPY Daily Outlook

Daily Pivots: (S1) 97.28; (P) 97.72; (R1) 98.50;

EUR/JPY rose to as high as 98.17 so far and the break of 97.81 resistance indicates that rebound from 94.11 has resumed. Intraday bias is back on the upside for further rally. The current rebound should at least be a correction to fall from 111.43 and should target 38.2% retracement of 111.43 to 94.11 at 110.72 next. On the downside, break of 95.71 support is needed to signal completion of such rebound. Otherwise, we'll stay bullish even in case of retreat.

In the bigger picture, there is no clear sign of reversal yet and the down trend from 2008 high of 169.96 could extend further lower 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 above 88.96 to contain downside, form a major bottom and bring reversal. So, focus will remain on reversal signal. Meanwhile, break of 10.62 resistance will be an early sign of medium term bottoming and will turn focus back to 111.43 key resistance for confirmation.