GBP/JPY Daily Outlook
Daily Pivots: (S1) 184.94; (P) 186.06; (R1) 187.89;
The break of 187.36 minor resistance suggests that rebound from 180.36 is resuming. More importantly, the development argues that correction pattern from 195.86 has completed with three waves down to 180.36. Further rise would be seen to 195.86 resistance next. On the downside, though, below 184.22 support will turn focus back to 180.36 low instead.
In the bigger picture, the break of the medium term trend line support is taken as a sign of trend reversal. This is supported by bearish divergence condition in weekly MACD. Also, GBP/JPY was close to key cluster resistance of 61.8% retracement of 251.09 to 116.83 at 199.80, which is close to 200 psychological level. Break of 174.86 will confirm trend reversal and bring deeper fall to 38.2% retracement of 116.83 to 195.86 at 165.67. In case of another rise, we'll be cautious on strong resistance from 199.80/200.00 to bring reversal finally.
EUR/JPY Daily Outlook
Daily Pivots: (S1) 135.31; (P) 135.97; (R1) 136.79;
Intraday bias in EUR/JPY remains neutral for the moment. At this point, we're slightly favoring the case that corrective fall from 141.04 is completed with three waves down to 132.22 already. Above 137.04 will target 138.99/141.04 resistance zone first. We'll be cautious on strong resistance from this zone to bring reversal to extend sideway trading. Nonetheless sustained break of 141.04 will target 100% projection of 126.09 to 141.04 from 132.33 at 147.17.
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.
