GBP/JPY Daily Outlook
Daily Pivots: (S1) 171.38; (P) 171.81; (R1) 172.59;
GBP/JPY surges to as high as 173.36 so far today and the strong break of 172.53 confirms resumption of rebound from 169.53. Intraday bias is back on the upside and break of 173.46 resistance bring further rally to 174.84 key resistance level. At this point, we'd remain cautious on strong resistance from there to bring reversal to extend the medium term sideway pattern. Below 172.53 minor support will turn bias back to the downside for 170.95 support. However, decisive break of 174.84 will confirm resumption of larger up trend.
In the bigger picture, the up trend from 116.83 (2011 low) might still extend to above 174.84. Nonetheless, upside momentum is rather unconvincing as seen in weekly MACD. Thus, even in that case, we'd expect strong resistance from 50% retracement retracement of 251.09 to 116.83 at 183.96 to limit upside. Meanwhile, sustained break of 163.87 support should confirm medium term topping at 174.84 and bring deeper correction to 147.61/156.77 support zone next.
EUR/JPY Daily Outlook
Daily Pivots: (S1) 137.60; (P) 137.96; (R1) 138.21;
EUR/JPY formed a temporary low at 137.71 and recovered mildly. Intraday bias is turned neutral first. Deeper decline is still expected as long as 140.09 resistance holds and below 137.71 will target 136.22 key support. On the upside, break of 140.09 will indicate short term bottoming and bring reversal. But after all, the cross is staying inside the sideway pattern from 145.68. More range trading is expected in near term.
In the bigger picture, loss of upside momentum was seen in bearish divergence condition in weekly MACD. However, EUR/JPY is so far holding above 135.50 key support. Thus, there is no confirmation of trend reversal yet. Break of 145.68 will extend the up trend from 94.11 towards 76.4% retracement of 169.96 to 94.11 at 152.59 before topping. Meanwhile, break of 135.50 will confirm reversal and target 124.95 support.
