GPB/JPY And EUR/JPY Daily Outlook: June 26, 2012

Daily Pivots: (S1) 123.22; (P) 124.43; (R1) 125.28

Intraday bias in GBP/JPY remains neutral for the moment. Rebound from 118.82 could still extend higher as long as 122.12 minor support holds. But considering bearish divergence condition in 4 hours MACD, even in the next rise, strong resistance will likely be seen ahead of 127.10 and bring reversal. On the downside, break of 122.12 will now indicate that corrective rise from 118.82 is finished and larger decline from 133.48 is resuming for a test on 116.83/117.29 support zone.

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.


EUR/JPY Daily Outlook

Daily Pivots: (S1) 98.81; (P) 99.96; (R1) 100.77

Intraday bias in EUR/JPY remains neutral for the moment. Rebound from 95.64 could extend higher with 98.53 minor support intact. But considering bearish divergence condition in 4 hours MACD, even in case of another rise, upside should be limited by 61.8% retracement of 108.00 to 95.64 at 103.27 and bring reversal. On the downside, break of 95.83 should now indicate that larger decline from 111.43 is resuming and should flip bias back to the downside for 95.64 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 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.