GPB/JPY And EUR/JPY Daily Outlook: January 2, 2013

Daily Pivots: (S1) 139.23; (P) 140.11; (R1) 141.76

GBP/JPY's rally accelerates to as high as 142.64 so far today and the strong break and sustained trading above 140 has some larger bullish implications. Intraday bias is on the upside for the moment and current rise is expected to target next medium-term retracement level at 145.39. On the downside, below 139.50 is needed to signal short-term topping. Otherwise, near-term outlook stays bullish even in case of retreat.

In the bigger picture, the strong break of 140.02 (50% retracement of 163.05 to 116.83 at 139.94) indicates that whole medium-term fall from 163.05 has completed at 116.83 already. It's a bit early to conclude reversal of the long-term down trend from 251.09 (2007 high). But rise from 116.83 should at least be a move at the same degree as fall from 163.05. Thus, a medium-term rise is now expected back to 163.05. We'll stay bullish as long as 133.48 resistance turned support holds.
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EUR/JPY Daily Outlook

Daily Pivots: (S1) 113.47; (P) 114.00; (R1) 114.95

EUR/JPY's rally resumed after brief consolidation and reaches as high as 115.93 so far today. Intraday bias is on the upside and current rally from 100.32, which is part of the rise from 94.11, should target 161.8% projection of 94.11 to 104.58 from 100.32 at 117.26 next. On the downside, break of 113.18 support is needed to indicate short-term topping. Otherwise, outlook will stay bullish even in case of retreat.

In the bigger picture, the strong break of 111.43 resistance should have confirmed long-term trend reversal in EUR/JPY. That is, whole down trend from 169.96 (2008 high) has completed at 94.11 already, on bullish convergence condition in weekly MACD. A medium-term rally is now expected that heads back 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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