GBP/JPY: No Impulsive Upside Move

Daily Pivots: (S1) 121.53; (P) 122.11; (R1) 122.43;

Near term outlook in GBP/JPY remains rather mixed for the moment. On the upside, break of 123.77/79 resistance will affirm the case that pull back from 125.82 is finished and rebound from 118.82 is resuming. However, break of 120.82 will extend the fall from 125.82 to retest 118.82 low.

In the bigger picture, there was so far no impulsive upside move after GBP/JPY formed a medium term bottom at 116.83. On the other hand, there was no sustainable selling neither. The development argues that even though there is no clear sign of trend reversal in GBP/JPY, it's more likely engaging in sideway consolidations, which corrects fall from 163.05. That is, we'd probably see more range trading between 116.83 and 140.02 (50% retracement of 163.05 to 116.83 at 139.94) ahead, before an eventual downside breakout.
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EUR/JPY Daily Outlook

Daily Pivots: (S1) 95.58; (P) 96.02; (R1) 96.34;

Intraday bias in EUR/JPY remains neutral for the moment. As noted before, 94.11 should be a short term bottom and consolidation from there should continue in near term. Above 97.32 will bring stronger recovery to falling trend line resistance (now at 98.17).

In the bigger picture, the down trend from 2008 high of 169.96 is still in progress and could extend further lower to 90 psychological level. However, as we're favoring the case that pattern from 139.21 is a falling wedge with bullish convergence condition in weekly MACD. Fall from 111.43 should be the last leg in such pattern. Hence, we'll expect strong support above 88.96 to contain downside, form a major bottom and bring reversal. So, focus will be on reversal signal.

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