GPB/JPY and EUR/JPY Outlook: February 16, 2012

Daily Pivots: (S1) 122.62; (P) 123.05; (R1) 123.51;

With 121.67 minor support intact, GBP/JPY's rally from 117.29 is still expected to continue. Current rally should target target 100% projection of 117.29 to 122.04 from 119.58 at 124.33 and above. Also, note that current rebound from 117.29 is viewed as third leg of the consolidation pattern from 116.83 and could target 127.30 resistance eventually. On the downside, below 121.67 minor support will flip bias back to the downside. Further break of 119.58 support will indicate that such rebound has indeed finished and would likely bring retest of 116.83 low then.

In the bigger picture, consolidation from 116.83 is still in progress and fall from 140.20, which is part of the medium term down trend from 163.05, is not ready to resume yet. While rise from 117.29 might extend further higher, we'd expect strong resistance from 50% retracement of 140.02 to 116.83 at 128.42 to finish the consolidation and bring down trend resumption. We will not consider medium term trend reversal yet before sustained trading above 128.42 fibonacci level.

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EUR/JPY Daily Outlook

Daily Pivots: (S1) 101.95; (P) 102.71; (R1) 103.25;

Deposit climbing to 103.49, EUR/JPY failed to sustain gain and retreated back. Intraday bias is turned neutral for the moment. With 101.81 support intact, another rise is still mildly in favor and above 103.49 will target 100% projection of 97.03 to 102.20 from 99.24 at 104.41. At this point, rebound from 97.03 is viewed as a correction only. Below 101.81 minor support will argue that such corrective rise is finished and flip intraday bias back to the downside. Further break of 99.24 will confirm and should send EUR/JPY through 97.03 low.

In the bigger picture, fall from 123.31 is part of the down trend from 2008 high of 169.96 and should target 100% projection of 139.21 to 105.42 from 123.31 at 89.52. At this point, we'd anticipate strong support there to bring at least a rebound attempt, as it's close to 88.96 all time low as well as100% projection of 123.31 to 100.74 from 111.57 at 89.00. Though, a break of 111.57 resistance is needed to be the first signal of medium term reversal. Otherwise, we'll continue to stay bearish in the cross even in case of strong rebound.

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