GPB/JPY And EUR/JPY Daily Outlook: September 21, 2012

Daily Pivots: (S1) 126.38; (P) 126.79; (R1) 127.20

GBP/JPY's consolidation from 128.82 is still in progress and deeper decline might be seen. But downside should be contained by 124.41 support and bring rebound. At this point, 128.82 looks like a short term top and more consolidative trading could be seen below there in the near-term. But an upside breakout is anticipated. Break of 128.82 will extend the rise from 118.82 to 133.48 resistance.

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) 101.03; (P) 101.59; (R1) 102.15

EUR/JPY's pull back from 103.86 might extend lower. But downside is expected to be contained by 99.52 minor support and bring another rebound. As noted before, 103.86 looks like a short-term top and thus, we'd expect more sideway trading to be seen first. Nonetheless, another rise is expected and above 103.86 will extend the rally from 94.11 to 61.8% retracement of 111.43 to 94.11 at 104.81 next.

In the bigger picture, current development continues to affirm the view that whole down trend form 169.96 (2008 high) has completed at 94.11. Focus is now on 111.43 key resistance level. Break will confirm this case and bring stronger rebound back to 123.31 resistance and above. We'd favor this bullish scenario as long as 99.52 support holds.
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