Daily Currency Outlook: GPB/JPY, EUR/JPY: July 04, 2013

Daily Pivots: (S1) 151.55; (P) 152.27; (R1) 153.32;

Intraday bias in GBP/JPY remains on the upside as rebound from 147.10 is still in progress for 154.22 and above. Such rebound could be the second leg of consolidation from 156.77. We'll stay cautious on reversal between 154.22 and 156.77. On the downside, below 149.24 will turn bias back to the downside for 147.10 and below.

In the bigger picture, a medium term top is in place at 156.77 on bearish divergence condition in daily MACD. Deeper pull back could be seen to 38.2% retracement of 118.82 to 156.77 at 142.27. Strong support would likely be seen at 140.37 to bring rebound, at least on first attempt. We still expect whole rise from 116.83 medium term bottom to resume later to 163.05 resistance and above after completing the correction.
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EUR/JPY Daily Outlook

Daily Pivots: (S1) 128.77; (P) 129.81; (R1) 130.98;

As noted before, a rebound from 124.95 might be finished at 131.11 and was a corrective move. The development argues that consolidation pattern from 133.80 is still in progress, with a fall from 131.11 as the third leg. Intraday bias remains mildly on the downside for 126.57 support first. Break will target 124.95 and below. Above 131.11 will bring another rally to extend the rebound from 124.95. Such a rebound could only be the second leg of the consolidation pattern from 133.80. Hence, we'd be cautious on reversal from 131.29/133.80.

In the bigger picture, current development argues that the medium term up trend from 94.11 has topped out at 133.80 on bearish divergence condition in daily MACD. Such a correction could extend with another fall to target 119.10 cluster support (38.2% retracement of 94.11 to 133.80 at 118.63). Strong support could be seen there, at least on an initial attempt. A break will target 61.8% retracement at 109.27. Considering the five wave structure of the rise from 94.11, we expect another medium term rally after completing the correction.
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