GPB/JPY And EUR/JPY Daily Currency Outlook: December 27, 2012

Daily Pivots: (S1) 137.11; (P) 137.66; (R1) 138.71

GBP/JPY rises to as high as 138.56 so far and intraday bias is now on the upside. Current rally should now target 140.02 key resistance level next. On the downside, break of 135.88 support is needed to signal short-term topping. Otherwise, the near-term outlook will stay bullish in case of retreat.

In the bigger picture, at this point, we'd like to maintain that price actions from 116.83 (2011 low) are corrective in nature so far. Rise from 118.82 could be the third leg of the pattern from 116.83 and is still in progress. After all, the likely scenario is that we'll 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.

We'll favor this view as long as 140.02 resistance holds. Nonetheless, sustained break of 140.02 will indicate that rise from 116.83 is at least a move at the same degree as fall from 163.05 and thus a stronger medium-term rise would then be seen back to this level.
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GBP/JPY" title="GBP/JPY" width="1594" height="745">
EUR/JPY Daily Outlook

Daily Pivots: (S1) 112.13; (P) 112.76; (R1) 113.82

EUR/JPY rises further to as high as 133.65 so far and intraday bias is on the upside for the moment. Current rise from 100.32 is part of the rally from 94.11 and should target 161.8% projection of 94.11 to 104.58 from 100.32 at 117.26 next. On the downside, break of 110.62 is needed to indicate short-term topping. Otherwise, outlook will stay bullish even in case of retreat.

In the bigger picture, we're favoring the case that whole down trend from 169.96 (2008 high) has completed at 94.11 already, on bullish convergence condition in weekly MACD. The sustained break above 55 weeks EMA affirmed this view. Break of 111.43 resistance should have confirmed this bullish case and bring further medium-term rise to 123.31 (38.2% retracement of 169.96 to 94.11 at 123.08) and above. And, we'll stay bullish as long as 104.58 resistance turned support holds.
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EUR/JPY" title="EUR/JPY" width="1594" height="745">