GPB/JPY And EUR/JPY Daily Outlook: November 20, 2012

Daily Pivots: (S1) 129.03; (P) 129.38; (R1) 129.83

GBP/JPY breached 129.64 briefly but without follow through buying. Upside momentum is also a bit unconvincing now. Intraday bias is turned neutral first. on the downside, below 128.25 minor support will bring deeper retreat but downside should be contained well above 125.67 support and bring another rally. Meanwhile, sustained break of 129.64 will confirm resumption of whole rise from 118.82 and should target upper channel resistance (now at 131.20) next.

In the bigger picture, at this point, we'd like to maintain that price actions from 116.83 (2011 low) are corrective in nature so far. Rise from 118.82 could be the third leg of the pattern from 116.83 and might target 133.48 and above. After all, the likely scenario is that we'll 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. We'll favor this view as long as 140.02 resistance holds.
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GBP/JPY" title="GBP/JPY" width="926" height="610">
EUR/JPY Daily Outlook

Daily Pivots: (S1) 103.77; (P) 104.05; (R1) 104.58

EUR/JPY edged higher again to 104.32 but upside momentum remains unconvincing. Intraday bias stays neutral first. On the downside, below 103.04 will bring deeper retreat but downside should be contained well above 100.32 support and bring another rise. Meanwhile, sustained break of 104.58 resistance will confirm resumption of whole rally from 94.11 and should target 61.8% projection of 94.11 to 104.58 from 100.32 at 106.79 next.

In the bigger picture, we're favoring the case that whole down trend from 169.96 (2008 high) has completed at 94.11 already, on bullish convergence condition in weekly MACD. Break of 111.43 resistance will confirm this bullish case and bring further medium term rise to 123.31 and above (38.2% retracement of 169.96 to 94.11 at 123.08). And, we'd favor this bullish scenario as long as 100.14 support holds. Though, considering that EUR/JPY can't take out 55 weeks EMA decisively yet, break of 100.14 will favor another low below 94.11 instead.
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EUR/JPY" title="EUR/JPY" width="926" height="610">