Daily Currency Outlook: GPB/JPY Correction Likely

Daily Pivots: (S1) 150.11; (P) 150.63; (R1) 151.28;

Intraday bias in GBP/JPY remains neutral for the moment with focus on 151.92. Break will resume the rebound from 147.10 and would affirm that correction from 156.77 has completed at 147.10. In such case, stronger rise should be seen to 154.22 and above. On the downside, below 148.85 will bring another fall to below 147.10 to extend the correction 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.


EUR/JPY Daily Outlook

Daily Pivots: (S1) 128.21; (P) 128.92; (R1) 129.69;

Focus in EUR/JPY remains on 129.90 resistance. Break will extend the rebound from 124.95 and affirm the case that correction from 133.80 has completed. In such case, stronger rally should be seen to 131.29 resistance and above. Meanwhile, below 126.57 will probably extend the correction from 133.80 to below 124.95.

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. Such correction 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.