Daily Currency Outlook: GPB/JPY And EUR/JPY: August 07, 2013

Daily Pivots: (S1) 149.44; (P) 150.43; (R1) 150.98;

GBP/JPY drops sharply to as low as 148.79 so far today and focus is back on 148.24 support. Break will resume the decline from 154.04. More importantly, this will also indicate that whole decline from 156.77 is resumed. Further break of 147.10 will target 100% projection of 156.77 to 147.10 from 154.04 at 144.37. On the upside, above 150.23 minor resistance will extend the consolidation from 147.10 instead.

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) 129.65; (P) 130.19; (R1) 130.58;

EUR/JPY drops to as low as 129.13 so far today. The break of 129.32 suggests fall from 132.73 has resumed. Also it revives the case that corrective rebound from 124.95 has completed at 132.73 already. Intraday bias is back on the downside and deeper fall should be seen to 128.01 support first. Break will confirm this bearish case and target 124.95 support next. On the upside, above 130.72 minor resistance will turn bias back to the upside for 131.96 resistance.

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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