Daily Outlook: GPB/JPY and EUR/JPY, February 14, 2012

Daily Pivots: (S1) 121.99; (P) 122.46; (R1) 122.74;

GBP/JPY's consolidation from 123.17 continues today and intraday bias remains neutral. With 121.40 minor support intact, another rise remains in favor. Above 123.17 will target 100% projection of 117.29 to 122.04 from 119.58 at 124.33 and above. Also, note that current rebound from 117.29 is viewed as third leg of the consolidation pattern from 116.83 and could target 127.30 resistance eventually. On the downside, below 121.40 minor support will flip bias back to the downside. Further break of 119.58 support will indicate that such rebound has indeed finished and would likely bring retest of 116.83 low then.

In the bigger picture, consolidation from 116.83 is still in progress and fall from 140.20, which is part of the medium term down trend from 163.05, is not ready to resume yet. While rise from 117.29 might extend further higher, we'd expect strong resistance from 50% retracement of 140.02 to 116.83 at 128.42 to finish the consolidation and bring down trend resumption. We will not consider medium term trend reversal yet before sustained trading above 128.42 fibonacci level.

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EUR/JPY Daily Outlook

Daily Pivots: (S1) 101.96; (P) 102.57; (R1) 102.89;

Intraday bias in EUR/JPY stays neutral for the moment and consolidation from 103.28 temporary top might extend. But still, another rise remains remain mildly in favor as long as 101.65 minor support holds. Above 103.38 will target 100% projection of 97.03 to 102.20 from 99.24 at 105.49. At this point, such rebound is still viewed as a correction only. Below 101.65 will argue that such corrective rise is finished and flip intraday bias back to the downside. Further break of 99.24 will confirm and should send EUR/JPY through 97.03 low.

In the bigger picture, fall from 123.31 is part of the down trend from 2008 high of 169.96 and should target 100% projection of 139.21 to 105.42 from 123.31 at 89.52. At this point, we'd anticipate strong support there to bring at least a rebound attempt, as it's close to 88.96 all time low as well as100% projection of 123.31 to 100.74 from 111.57 at 89.00. Though, a break of 111.57 resistance is needed to be the first signal of medium term reversal. Otherwise, we'll continue to stay bearish in the cross even in case of strong rebound.

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