GBP/JPY Daily Outlook
Daily Pivots: (S1) 191.80; (P) 192.36; (R1) 192.89;
As noted before, a short term top is in place at 195.86 on bearish divergence condition in 4 hours MACD. Deeper fall is expected as correction to 38.2% retracement of 174.86 to 195.86 at 187.83. On the upside, break of 195.86 is needed to confirm up trend resumption. Otherwise, we'd expect consolidative trading to continue in near term with risk of deeper fall.
In the bigger picture, the up trend from 116.83 is still in progress and would target 61.8% retracement of 251.09 to 116.83 at 199.80, which is close to 200 psychological level. Medium term momentum is not too convincing with bearish divergence condition in weekly MACD. We'd be cautious on medium term topping around 200 and bring a deep correction. Meanwhile, break of 174.86 will suggest that the trend has reversed earlier than we expect.
EUR/JPY Daily Outlook
Daily Pivots: (S1) 135.60; (P) 136.67; (R1) 137.47;
Intraday bias in EUR/JPY remains neutral. At this point, we'd still favor another decline in the cross. Break of 133.09 will confirm completion of rebound from 133.09. In such case, EUR/JPY should target a test on 126.09 low. However, break of 141.04 will extend the rebound from 126.09 towards 149.76. Overall, price actions from 149.76 are viewed as a consolidation pattern. Thus, we'd expect strong support from 126.09 and strong resistance from 149.76 to keep the cross in range.
In the bigger picture, price actions from 149.76 medium term top is viewed as corrective in nature. Strong rebound after failing to sustain below 38.2% retracement of 94.11 to 149.76 at 128.50 argues that it's developing into a sideway pattern. We'd expect more range trading between 126.09 and 149.76 in medium term. And that should then be followed by an upside breakout at a later stage. Nonetheless, decisive break of 126.09 would extend the correction towards 61.8% retracement at 115.36.
