GPB/JPY And EUR/JPY Daily Outlook: July 30, 2012

Daily Pivots: (S1) 121.32; (P) 122.16; (R1) 123.49

Intraday bias in GBP/JPY remains on the upside with 122.45 minor support intact. Break of 123.79 resistance will confirm that choppy decline from 125.82 has finished already. More importantly, it will argue that whole rebound from 118.82 is resuming for 125.82 and above. On the downside, below 122.45 minor support will flip bias back to the downside for 120.82 instead.

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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EUR/JPY Daily Outlook

Daily Pivots: (S1) 95.74; (P) 96.54; (R1) 97.43

With 95.64 minor support intact, intraday bias in EUR/JPY remains mildly on the upside for falling trend line resistance (now at 98.66). On the downside, below 95.64 minor support will turn bias back to the downside for retesting 94.11 low. However, note that a short-term bottom is in place at 94.11 on bullish convergence condition in 4 hours MACD. Thus, more consolidative trading could be seen above there in near-term.

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 be on reversal signal.
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