GBP/JPY Daily Outlook
Daily Pivots: (S1) 187.93; (P) 189.76; (R1) 191.29;
GBP/JPY drops sharply to as low as 187.12 so far today and broke mentioned 38.2% retracement of 174.86 to 195.86 at 187.83. There is no clear sign of bottoming yet and intraday bias remains on the downside. Deeper fall would be seen to 61.8% retracement at 182.88. On the upside, above 189.39 minor resistance will turn bias neutral and bring recovery.
In the bigger picture, the up trend from 116.83 is still in progress and would target 61.8% retracement of 251.09 to 116.83 at 199.80, which is close to 200 psychological level. Medium term momentum is not too convincing with bearish divergence condition in weekly MACD. We'd be cautious on medium term topping around 200 and bring a deep correction. Meanwhile, break of 174.86 will suggest that the trend has reversed earlier than we expect.
EUR/JPY Daily Outlook
Daily Pivots: (S1) 133.74; (P) 134.70; (R1) 135.90;
The breach of 133.77 suggests that fall from 141.04 is resuming. As noted before, we're favoring the case the rebound from 126.09 has completed at 141.04 already, after hitting 61.8% retracement of 149.76 to 126.09. Thus, deeper fall is expected. Break of 133.77 will confirm this bearish case and target a test on 126.09 low. However, break of 141.04 will extend the rebound from 126.09 towards 149.76.
In the bigger picture, price actions from 149.76 medium term top is viewed as corrective in nature. Strong rebound after failing to sustain below 38.2% retracement of 94.11 to 149.76 at 128.50 argues that it's developing into a sideway pattern. We'd expect more range trading between 126.09 and 149.76 in medium term. And that should then be followed by an upside breakout at a later stage. Nonetheless, decisive break of 126.09 would extend the correction towards 61.8% retracement at 115.36.
