GPB/JPY and EUR/JPY Outlook: February 7, 2012

Daily Pivots: (S1) 120.65; (P) 120.95; (R1) 121.42;

GBP/JPY's recovery from 119.58 is still in progress and intraday bias remains mildly on the upside for 122.04 resistance. Break will resume rebound from 117.29 for 122.76 first. Also, as noted before, rise from 117.29 is viewed as the third leg of the consolidation pattern from 116.83. Break of 122.76 will target a test on 127.30 key resistance. On the downside below 120.22 will turn bias neutral again. Also, note that break of 119.19 will indicate completion of the rebound and flip bias back to the downside for 117.29 instead.

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) 100.04; (P) 100.32; (R1) 100.79;

EUR/JPY is still bounded in range of 99.13/100.88 and intraday bias remains neutral. As noted before, above 100.88 minor resistance will indicate that retreat from 102.20 has finished. In such case, intraday bias should be flipped back to the upside to extend the rebound from 97.03 through 102.20 resistance towards falling trend line resistance (now at 105.56). Though, break of 99.13 support will indicate that such rebound is finished at 102.20 already and should flip bias back to the downside for retesting 97.03 first.

In the bigger picture, current 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 rebound.



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