GPB/JPY and EUR/JPY Outlook: February 20, 2012

Daily Pivots: (S1) 124.83; (P) 125.45; (R1) 126.37;

GBP/JPY rises further to as high as 126.83 so far today and intraday bias remains on the upside for 127.30 resistance, which is close to 161.8% projection of 117.29 to 122.04 from 119.58 at 127.26. At noted before, we're treating rebound from 117.29 as the third leg of consolidation pattern from 116.83. Hence, we'd expect upside to be limited by 50% retracement of 140.02 to 116.83 at 128.42 to finish the consolidation and bring down trend resumption. Below 124.49 minor support will turn bias neutral first. Break of 122.04 should then bring retest of 116.83 low next.

In the bigger picture, the choppy decline from 163.05 is viewed as part of the down trend from 251.09 and there is no clear sign of reversal yet. Such down trend is expected to continue after consolidation pattern from 116.83 finishes and target 110 psychological next. However, sustained break of above mentioned 128.42 will raise the odds that GBP/JPY has bottomed in medium term and will turn focus back to 140.20 resistance for confirmation.

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EUR/JPY Daily Outlook

Daily Pivots: (S1) 103.72; (P) 104.19; (R1) 104.95;

EUR/JPY rises further to as high as 105.74 so far today and intraday bias remains on the upside. Sustained trading above the falling trend line resistance (now at 104.96) will argue that whole fall from 123.31 has completed and bring stronger rise towards 161.8% projection of 97.03 to 102.20 from 99.24 at 107.60. Though, reversal from the current level, followed by break of 103.65 minor support will flip bias back to the downside first. Further break of 102.20 will argue that rebound from 97.03 is finished and will turn outlook bearish for 99.24 support and below.

In the bigger picture, at this point, there is no clear sign of trend reversal in EUR/JPY yet. Fall from 123.31, which is part of the down trend from 2008 high of 169.96 is still expected to continue after corrective rebound from 97.03 finishes. Next target is 100% projection of 139.21 to 105.42 from 123.31 at 89.52. But in that case, we'd anticipate strong support there to bring at least a rebound attempt, as it's close to 88.96 all time low. However, sustained trading above the above mentioned trend line will be the first signal of reversal on bullish convergence condition in daily MACD. Further break of 111.57 should confirm medium term bottoming and target 123.31 resistance and above.

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