GBP/JPY Daily Outlook
Daily Pivots: (S1) 171.72; (P) 172.22; (R1) 172.54;
Intraday bias in GBP/JPY remains neutral for the moment. Our view remains unchanged - a break of 173.46 will extend the rise from 163.87 but will face strong resistance from 174.84 to bring reversal. The consolidation pattern from 174.84 is expected to have another falling leg before completion. On the downside, below 171.21 will turn bias back to the downside for 169.50. A break will indicate that the third leg has stared and should target 167.77 support and below.
In the bigger picture, the uptrend from 116.83 (2011 low) might still extend to above 174.84. Nevertheless, upside momentum is rather unconvincing as seen in weekly Moving Average Convergence/Divergence (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, a sustained break of 163.87 support should confirm medium term topping at 174.84 and bring a deeper correction to the 147.61/156.77 support zone .
EUR/JPY Daily Outlook
Daily Pivots: (S1) 139.75; (P) 140.34; (R1) 140.71;
Intraday bias in EUR/JPY remains neutral for some consolidations above 139.88 temporary low. We're favoring the case that a rebound from 136.22 has already completed at 143.78 and the consolidation pattern from 145.68 has started the third leg down. Upside of the recovery from 139.88 should be limited well below 142.47 resistance and bring another decline. A fall below 139.88 will target 136.22 support and lower.
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, a break of 135.50 will confirm a reversal and target 124.95 support.
