Daily Currency Outlook: GPB/JPY And EUR/JPY: May 27, 2013

Daily Pivots: (S1) 152.01; (P) 153.38; (R1) 154.47;

GBP/JPY's consolidation from 156.77 short term top is still in progress. Deeper pullback could be seen but in that case, downside is expected to be contained by 146.42 cluster support (61.8% retracement of 140.37 to 156.77 at 146.63) and bring rebound. The larger rise is still in favor to continue through 156.77.

In the bigger picture, the medium term rise from 116.83 is still in progress. As noted before, whether such rally is impulsive or corrective in nature, it's at least a move at the same degree as fall from 163.05. We expect the current rise to extend to 163.05 resistance and above. However, considering the bearish divergence condition in the daily MACD, a break of 146.42 will indicate medium term topping and should bring deeper fall back to 140.37 and below.

GBP/JPY H4" title="GBP/JPY H4" width="600" height="600">

GBP/JPY" title="GBP/JPY" width="600" height="600">
EUR/JPY Daily Outlook

Daily Pivots: (S1) 129.83; (P) 131.20; (R1) 132.31;

The EUR/JPY's consolidation from 133.80 short term top is still in progress, and a deeper decline cannot be ruled out. Even in the case of a deep pull back, downside should be contained by 124.84 cluster support (61.8% retracement of 119.10 to 133.80 at 124.75) and bring rally resumption. We anticipate another rise through 133.80, towards 61.8% projection of 100.32 to 127.70 from 119.10 at 136.02

The uptrend from 94.11 long term bottom is starting to lose momentum, with bearish divergence condition seen in the daily MACD. While further rise is still in favor for the moment, we'd probably see strong resistance between projection level at 136.02 and 61.8% retracement of 169.96 to 94.11 at 140.98 to limit upside and bring a sizeable consolidation/correction. A break of 124.84 will confirm medium term topping and target 119.10 and below. Considering the five wave structure of the rise from 94.11, we'd expect another medium term rally after completing the anticipated correction.
EUR/JPY H4" title="EUR/JPY H4" width="600" height="600">

EUR/JPY" title="EUR/JPY" width="600" height="600">