GBP/JPY Daily Outlook
Daily Pivots: (S1) 147.71; (P) 148.93; (R1) 149.59;
Despite dropping sharply from 150.29, GBP/USD is holding above 147.03 minor support. Intraday bias remains neutral first. While another rise cannot be ruled out, we maintain the view that rebound from 144.97 is a corrective move. Therefore, 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) 128.98; (P) 130.00; (R1) 130.50;
EUR/JPY drops to as low as 128.94 so far. Break of 129.34 indicates resumption of whole decline from 137.49. Intraday bias is back on the downside for 61.8% projection of 137.49 to 129.34 from 132.40 at 127.36 next. On the upside, break of 131.05 minor resistance is needed to indicate short term bottoming. Otherwise, outlook will remain bearish in case of recovery.
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. Sustained break there would pave the way to 61.8% retracement at 119.90. 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.
