GBP/JPY Daily Outlook
Daily Pivots: (S1) 194.19; (P) 194.72; (R1) 195.51;
The break of 191.94 support indicates that a short term top is formed at 195.82, on bearish divergence condition in 4 hours MACD. Intraday bias is turned to the downside for correction to 38.2% retracement of 174.86 to 195.86 at 187.83. On the upside, break of 195.86 is needed to confirm up trend resumption. Otherwise, we'd expect consolidative trading to continue in near term with risk of deeper fall.
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) 137.88; (P) 138.27; (R1) 138.76;
EUR/JPY's sharp fall and strong break of 136.95 support turned resistance indicates that rebound from 126.09 has completed at 141.04. Intraday bias is back on the downside for 133.09 support first. Break will target 126.09 low. On the upside, above 137.65 is needed to indicate completion of the fall from 141.04. Otherwise, deeper decline is still expected. Overall, EUR/JPY is staying in consolidation pattern from 149.76 and we might see strong support around 126.09 and bring rebound.
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.
