GBP/JPY Daily Outlook
Daily Pivots: (S1) 148.53; (P) 149.15; (R1) 149.75;
GBP/JPY’s recovery from 144.97 is still in progress and further rise could be seen. But again, such rise is viewed as a corrective move. And hence, strong resistance is expected from 150.92 (50% retracement of 156.59 to 144.97 at 150.78) to bring fall resumption. On the downside, below 147.03 will bring retest of 144.97 low first. Break will extend the decline from 156.59 to 143.51 medium term fibonacci level next. However, sustained break of 150.92 will pave the way back to retest 156.69 high.
In the bigger picture, the case for medium term reversal continues to build up. There is bearish divergence condition in daily MACD. 146.96 support was taken out. And GBP/JPY was rejected by 55 month EMA. Break of 38.2% retracement of 122.36 to 156.59 at 143.51 will pave the way to 61.8% retracement at 135.43 and below. This will now be the preferred case as long as 150.92 resistance holds.
EUR/JPY Daily Outlook
Daily Pivots: (S1) 130.33; (P) 130.69; (R1) 131.20;
EUR/JPY continues to gyrate in range of 129.34/132.40 and intraday bias remains neutral first. Overall, we’d expect upside of the consolidation to be limited by 38.2% retracement of 137.49 to 129.34 at 132.45 to bring fall resumption eventually. On the downside, decisive break of 129.34 will confirm resumption of whole fall 137.49 and target 126.61 medium term fibonacci level. However, firm break of 132.45 will target 61.8% retracement at 134.37 instead.
In the bigger picture, current development argues that rise from 109.03 (2016 low) has completed at 137.49, on bearish divergence condition in weekly MACD. Deeper fall should be seen to 38.2% retracement of 109.03 to 137.49 at 126.61 first. On the upside, break of 137.49 is needed to confirm medium term rise resumption. Otherwise, risk will now stay on the downside even in case of strong rebound.
