GPB/JPY And EUR/JPY Daily Outlook: August 8, 2012

Daily Pivots: (S1) 121.95; (P) 122.60; (R1) 123.42

GBP/JPY continues to be bounded in range of 120.82/77 and intraday bias remains neutral for the moment. On the upside, break of 123.77/79 resistance will confirm completion of the pull back from 125.82. More importantly, this will argue that whole rebound from 118.82 is resuming for 125.82 and above. On the downside, however, break of 120.82 will extend the decline from 125.82 to retest 118.82 low.

In the bigger picture, there was so far no impulsive upside move after GBP/JPY formed a medium term bottom at 116.83. On the other hand, there was no sustainable selling neither. The development argues that even though there is no clear sign of trend reversal in GBP/JPY, it's more likely engaging in sideway consolidations, which corrects fall from 163.05. That is, we'd probably 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.
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GBP/JPY" title="GBP/JPY" width="911" height="662">
EUR/JPY Daily Outlook

Daily Pivots: (S1) 96.92; (P) 97.36; (R1) 97.90

EUR/JPY's rebound last steam after hitting near term falling trend line. With 4 hours MACD crossed below signal line, intraday bias is turned neutral. Another rally could still be seen and above 97.81 will target 100 psychological level or further to 101.62 resistance. Though, reversal from the trend line resistance, followed by break of 94.92, will bring downtrend resumption for 90 psychological level instead.

In the bigger picture, the downtrend from 2008 high of 169.96 is still in progress and could extend further lower to 90 psychological level. However, as we're favoring the case that pattern from 139.21 is a falling wedge with bullish convergence condition in weekly MACD. Fall from 111.43 should be the last leg in such pattern. Hence, we'll expect strong support above 88.96 to contain downside, form a major bottom and bring reversal. So, focus will remain on reversal signal.
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EUR/JPY" title="EUR/JPY" width="911" height="662">