GPB/JPY And EUR/JPY Currency Outlook: September 11, 2013

Daily Pivots: (S1) 156.70; (P) 157.38; (R1) 158.58;

The GBP/JPY rises further to as high as 158.19 so far today. The break of 156.77 resistance indicates that larger rally from 116.83 has resumed. Bias is on the upside and GBP/JPY should target next key resistance level at 163.05. On the downside, a break of 154.67 support is needed to indicate short term topping. Otherwise, the outlook will stay bullish in case of retreat.

In the bigger picture, the rally from 116.83 medium term bottom has just resumed and further rally should be seen back to the 163.05 resistance. We'd be cautious on strong resistance from there to bring a reversal. Though, a break of 147.10 is needed to signal completion of the rise. Otherwise, outlook will stay bullish.

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EUR/JPY

Daily Pivots: (S1) 132.29; (P) 132.79; (R1) 133.68;

Intraday bias in EUR/JPY remains on the upside for the moment and current rally would extend towards 133.80 resistance. We'd stay cautious on strong resistance from 133.80 to limit upside to bring reversal. A break of 130.97 will turn bias back to the downside for 129.30 and below. However, a sustained break of 133.80 will indicate resumption of larger rally and should target the 140 psychological level next.

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