GBP/JPY
Daily Pivots: (S1) 170.22; (P) 170.85; (R1) 171.90;
The GBP/JPY rebounded strongly ahead of 169.50 support and intraday bias is turned neutral first. Overall outlook is unchanged. price actions from 174.84 are viewed as a consolidation pattern. In case of another rise, strong resistance should be seen form 174.84 to limit upside and bring reversal. We're expecting another fall as the third leg before the consolidation pattern completes. Break of 169.50 will target 167.77 and below.
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 Pivots: (S1) 138.27; (P) 138.59; (R1) 139.05;
With 139.87 minor resistance intact, deeper decline is still expected in the EUR/JPY. Consolidation pattern from 145.68 is in the third leg and current fall should target 136.22 support. However, break of 139.87 will dampen this immediate bearish view and bring consolidations before staging another decline.
In the bigger picture, loss of upside momentum was seen in bearish divergence condition in daily and 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.
