GBP/JPY Daily OutlookDaily Pivots: (S1) 168.82; (P) 169.25; (R1) 169.60;
Intraday bias in GBP/JPY remains neutral as the consolidation from 167.77 temporary low continues. Near term outlook is unchanged. Corrective rise from 163.87 has completed with three waves up to 173.57 already. Fall from there is viewed as the third leg of the correction pattern from 174.84. We'd expect upside of the consolidation from 167.77 to be limited below 173.57 and bring fall resumption. Below 167.77 will target 163.87 and below.
In the bigger picture, the up trend from 116.83 (2011 low) might still extend to above 174.84. Nonetheless, upside momentum is rather unconvincing as seen in weekly MACD. Thus, even in that case, we'd expect strong resistance from 50% retracement retracement of 251.09 to 116.83 at 183.96 to limit upside. Meanwhile, sustained break of 163.87 support should confirm medium term topping at 174.84 and bring deeper decline to 147.61/156.77 support zone next.
EUR/JPY Daily Outlook
Daily Pivots: (S1) 140.26; (P) 140.88; (R1) 141.27;
EUR/JPY's break of 104.44 indicates that decline from 143.78 has resumed and intraday bias is back on the downside. As noted before, corrective rise from 136.22 should have completed with three waves up to 143.78 already. Fall from 143.78 is viewed as the third wave of the correction pattern from 145.68. Deeper fall should be seen to 138.78 support. Break will target 136.22 and below. On the upside, break of 141.88 minor resistance is needed to indicate short term bottoming. Otherwise, near term outlook stays cautiously bearish.
In the bigger picture, loss of upside momentum was seen in bearish divergence condition in daily and weekly MACD. However, EUR/JPY is so far holding above 135.50 key support. Thus, there is no confirmation of trend reversal yet. Break of 145.68 will extend the up trend from 94.11 towards 76.4% retracement of 169.96 to 94.11 at 152.59 before topping. Meanwhile, break of 135.50 will confirm reversal and target 124.95 support.
