Daily Pairs Outlook, GPB/JPY And EUR/JPY: July 25, 2013

Daily Pivots: (S1) 152.85; (P) 153.45; (R1) 154.09;

With 4 hours MACD crossed below signal line, intraday bias in GBP/JPY is turned neutral first. Further rally cannot be ruled out yet and above 154.04 will target 154.22 and above. But again, rebound from 147.10 is viewed as the second leg of consolidation pattern from 156.77. Thus, we'd be cautious on reversal below 156.77 to start the third leg. Meanwhile, below 152.04 minor support will turn bias back to the downside for 148.77 and below.

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) 131.54; (P) 132.14; (R1) 132.91;

Intraday bias in EUR/JPY remain son the upside as rebound from 124.95 extends. Further rally could be seen. But again, note again that such rebound from 124.95 is viewed as the second leg of the consolidation pattern from 133.80. Hence, we'd be cautious on reversal below 133.80 as consolidation from there might extend with another falling leg. Below 130.76 minor support will flip bias back to the downside for 128.01 support first.

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. Correction 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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