Daily Currency Outlook: GPB/JPY And EUR/JPY: August 06, 2013

Daily Pivots: (S1) 150.31; (P) 150.90; (R1) 151.49;

Intraday bias in GBP/JPY remains neutral first. Above 151.53 will bring further rebound towards 154.04 to extend the consolidation from 147.10. Though, we'd expect strong resistance above 154.04 to bring reversal. Meanwhile, below 148.24 will target 147.10 and below.

In the bigger picture, a medium term top is in place at 156.77 on bearish divergence condition in daily MACD. Deeper pull back could be seen to 38.2% retracement of 118.82 to 156.77 at 142.27. Strong support would likely be seen at 140.37 to bring rebound, at least on first attempt. Overall, we'd still expect whole rise from 116.83 medium term bottom to resume later to 163.05 resistance and above after completing the correction.
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EUR/JPY Daily Outlook

Daily Pivots: (S1) 129.78; (P) 130.66; (R1) 131.18;

Intraday bias in EUR/JPY stays neutral for the moment. Above 131.96 will target 132.73 and above. But again, recovery from 124.95 has a corrective look and could be the second leg of the consolidation from 133.80 only. We'd expect some strong resistance below 133.80 to bring reversal. Below 129.32 will start the third leg and target 124.94 support.

In the bigger picture, current development argues that the medium term up trend from 94.11 has topped out at 133.80 on bearish divergence condition in daily MACD. Consolidation from there could extend with another fall to target 119.10 cluster support (38.2% retracement of 94.11 to 133.80 at 118.63). Strong support would be seen there, at least on initial attempt. But, break will target 61.8% retracement at 109.27. Nonetheless, considering the five wave structure of the rise from 94.11, we'd expect another medium term rally after completing the correction.
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