GPB/JPY And EUR/JPY Currency Outlook: August 26, 2013

Daily Pivots: (S1) 153.17; (P) 153.91; (R1) 154.41;

Further rise is still mildly in favor in GBP/JPY with 151.73 minor support intact. Note again that consolidation from 156.77 is still in progress with price actions from 147.10 as the second leg. We'd thus expect strong resistance below 156.77 to bring reversal to extend the consolidation. Below 151.73 minor support will turn bias back to the downside for 147.10/61 support zone first.

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 as consolidation from there extends. 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 Pivots: (S1) 131.77; (P) 132.09; (R1) 132.38;

Intraday bias in EUR/JPY remains on the upside for 132.73 resistance and above. As noted before, consolidation pattern from 133.80 top is still in progress with choppy rise from 124.95 as the second leg. Hence, strong resistance is expected below 133.80 to bring another fall to extend the consolidation. On the downside, below 130.28 minor support will turn bias back to the downside for 127.96 support first.

In the bigger picture, medium term up trend from 94.11 has topped out at 133.80 on bearish divergence condition in daily MACD. Consolidation 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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