GPB/JPY and EUR/JPY Outlook: February 17, 2012

Daily Pivots: (S1) 123.41; (P) 124.10; (R1) 125.40; More

GBP/JPY rises further to as high as 125.22 so far and breaks mentioned target of 100% projection of 117.29 to 122.04 from 119.58 at 124.33. Intraday bias remains on the upside and current rally should now target 161.8% projection at 127.26 which is close to 127.30 key resistance level. On the downside, below 124.49 minor support will turn bias neutral and bring consolidations. But break of 122.04 resistance turned support is needed to signal completion of rebound form 117.29. Otherwise, outlook will remain bullish even in case of retreat.

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) 102.44; (P) 103.14; (R1) 104.35;

EUR/JPY's rally resumed after retreat and reaches as high as 104.02 so far today. Intraday bias is back on the upside for 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 and hence we'll be cautious on reversal signal as EUR/JPY approaches falling trend line resistance (now at 105.23). Break of 101.92 support will argue that such rebound is finished and turn bias back to the downside for 99.24 support. However, sustained trading above the trend line will raise the possibility of reversal and will turn focus to 111.57 resistance first.

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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