GPB/JPY And EUR/JPY Daily Outlook: June 18, 2012

Daily Pivots: (S1) 122.65; (P) 123.20; (R1) 124.27

GBP/JPY jumps sharply higher today and the break of 124.34 suggests that rebound form 118.82 has resumed. Intra-day bias is back on the upside and break of 124.64 resistance will target 127.10 support turned resistance next. On the downside, break of 122.12 support, however, will indicate that the corrective rebound from 118.82 has completed and will flip bias back to the downside for retesting 118.82 low instead.

In the bigger picture, the corrective structure of the rebound from 116.83 to 133.48 indicates that downtrend 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.
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EUR/JPY Daily Outlook

Daily Pivots: (S1) 98.96; (P) 99.65; (R1) 100.23

EUR/JPY opened the week sharply higher today and even though it's still being limited below 100.90 temporary top, current momentums suggests that the cross will likely take out this resistance. Intra-day bias is cautiously on the upside for the moment. Break of 100.90 will extend the corrective rise from 95.64 towards 61.8% retracement of 108.00 to 95.64 at 103.27. Meanwhile, on the downside, break of 98.53 will indicate that such correction is already finished and should flip bias back to the downside for retesting 95.64 first.

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 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.
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