GPB/JPY And EUR/JPY Daily Outlook: September 13, 2012

Daily Pivots: (S1) 124.95; (P) 125.28; (R1) 125.68

Intraday bias in GBP/JPY remains neutral and some more consolidations could be seen. But downside should be contained above 123.69 minor support and bring another rise. Prior break of 125.82 resistance confirmed resumption of whole rebound from 118.82. Above 126.19 will target 100% projection of 118.82 to 125.82 from 120.82 at 127.82 next.

In the bigger picture, at this point, we'd like to maintain that price actions from 116.83 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. But this is far from being certain.

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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EUR/JPY Daily Outlook

Daily Pivots: (S1) 99.89; (P) 100.26; (R1) 100.78

Intraday bias in EUR/JPY remains on the upside for 38.2% retracement of 111.43 to 94.11 at 110.72 first. Break will target 101.62 key resistance next. On the downside, below 99.52 minor support will turn bias neutral and bring consolidations. But retreat should be contained above 97.98 support and bring another rally.

In the bigger picture, as noted before, fall from 139.21 is viewed as part of the downtrend from 2008 high of 169.96. Such pattern is seen as a falling wedge with bullish convergence condition in weekly MACD. Current development is raising the odd that such downtrend is finished at 94.11.

Break of 101.62 will be another sign that affirm this bullish view and will turn focus back to 111.43 key resistance for confirmation. Before, that, another decline could be seen but even in that case, we'll expect strong support above 88.96 to contain downside, form a major bottom and bring reversal.
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