GPB/JPY And EUR/JPY Daily Outlook: July 3, 2012

Daily Pivots: (S1) 123.61; (P) 124.55; (R1) 126.23

Intraday bias in GBP/JPY remains on the upside for 125.82 resistance. Break will confirm resumption of whole rebound from 118.82 and should target 127.10 resistance next. The development, with strong momentum also argue that fall from 133.48 might be over at 118.82 already. Break of 127.10 will target a test on 133.48 next. On the downside, break of 122.86 is needed to indicate completion of rebound from 118.82. Otherwise, near-term outlook will remain cautiously bullish even in case of retreat.

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.
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EUR/JPY Daily Outlook

Daily Pivots: (S1) 99.19; (P) 100.29; (R1) 102.06

Intraday bias in EUR/JPY remains cautiously on the upside for the moment. Break of 101.62 will confirm resumption of rebound from 95.64 and should target 50% retracement of 111.43 to 95.64 at 103.53. On the downside, break of 98.32 support is needed to signal completion of such rebound. Otherwise, near-term outlook will stay cautiously bullish even in case of retreat.

In the bigger picture, with 111.43 resistance intact, the down trend 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 be on reversal signal in case of another decline. Meanwhile, a break of 104.61 will be the first signal of reversal while further break of 111.43 should confirm.
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