GPB/JPY And EUR/JPY Daily Outlook: June 11, 2012

Daily Pivots: (S1) 121.91; (P) 122.87; (R1) 123.84

GBP/JPY recovers strongly today but is still limited below 124.34/64 resistance zone. Intra-day bias remains neutral for the moment. On the downside, below 121.33 minor support will indicate that corrective rise from 118.82 is already completed and the decline from 133.48 is resuming. In such case, GBP/JPY should drop through 118.82 to 116.83/117.29 support zone. However, on the upside, break of 124.64 should bring stronger rally to 127.10 support turned resistance instead.

In the bigger picture, the corrective structure of the rebound from 116.83 to 133.48 indicates that down trend from 2007 high of 251.09 is not finished yet. Break of 116.83 will resume such downtrend and target 110 psychological level first. Break will pave the way to the more important 100 level and possibly below. On the upside, however, above 127.01 will firstly indicate that fall from 133.48 is finished. Further, break of 133.48 should then confirm medium-term reversal.


EUR/JPY Daily Outlook

Daily Pivots: (S1) 98.58; (P) 99.42; (R1) 100.31

The break of 100.62 minor resistance indicate that rebound from 95.64 has resumed. Intra-day bias is back to the upside for 61.8% retracement of 108.00 to 95.64 at 103.27 first. Break will put focus on key near term resistance level at 104.61. Note that while the rebound from 95.64 is so far stronger there expected, there is no clear sign of reversal yet. And, such rebound might still be a correction only. Below 98.53 minor support will flip bias back to the downside for 95.64 low and below.

In the bigger picture, the larger downtrend from 2008 high of 169.96 is still in progress and could extend further lower towards 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 a reversal signal in case of another decline. Meanwhile, break of 104.61 will be the first signal of reversal while further break of 111.43 should confirm.