GPB/JPY And EUR/JPY Currency Outlook: September 10, 2013

Daily Pivots: (S1) 155.63; (P) 156.12; (R1) 156.76;

The GBP/JPY's rally continues and is now pressing 156.77 resistance. We'd stay cautious on reversal at current level. Below 154.13 will turn bias back to the downside to extend the consolidation from 156.77. However, a sustained break of 156.77 will indicate larger rally resumption for 160 psychological level next.

In the bigger picture, a medium term top is in place at 156.77 on bearish divergence condition in daily MACD. A 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 a rebound, at least on first attempt. Overall, we'd still expect a whole rise from 116.83 medium term bottom to resume later to the 163.05 resistance and above after completing the correction.

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EUR/JPY Daily Outlook

Daily Pivots: (S1) 131.22; (P) 131.71; (R1) 132.46;

The EUR/JPY rises further today and break of 132.42 suggests rebound from 124.95 is resuming. Intraday bias is back on the upside. Overall outlook is unchanged as the EUR/JPY is being bounded in consolidation pattern from 133.80. We'd be cautious on strong resistance from 133.80 to limit the upside to bring a reversal. A break of 130.97 will turn bias back to the downside for 129.30 and below. However, sustained break of 133.80 will indicate resumption of larger rally and should target 140 psychological level next.

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 55 weeks EMA (now at 121.76) and below. But we'd expect strong support from 119.10 cluster support (38.2% retracement of 94.11 to 133.80 at 118.63) to contain downside. 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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