Daily Currency Outlook: GPB/JPY and EUR/JPY

Intraday bias in GBP/JPY remains on the upside with 131.44 minor support intact and current rally is expected to continue to 140.02 key resistance level. On the downside, below 131.44 minor support, however, will indicate near term topping with bearish divergence condition in 4 hours MACD. Lengthier consolidation would be seen in this case, but we'd expect strong support from 126.54 to contain downside and bring another rally.

In the bigger picture, recent development argues that choppy decline from 163.05 is completed at 116.83 already. Focus remains on 140.02 and sustained break there will confirm this bullish case. More importantly, this will also signal completion of the whole down trend from 2007 high of 251.09. In such case, stronger rise should be seen back to retest on 163.05 resistance next. Though, failure below 140.02 resistance will indicate that GBP/JPY is merely in sideway trading pattern between 116.83 and 140.02.
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GBP/JPY" title="GBP/JPY" width="911" height="662">
EUR/JPY Daily Outlook

Daily Pivots: (S1) 110.37; (P) 110.59; (R1) 110.92;

EUR/JPY rises further to as high as 111.16 so far and intraday bias remains on the upside for 111.57 resistance. As noted before, break of 111.57 will affirm the bullish that that fall from 123.31 has completed at 97.03 on bullish convergence condition in daily MACD. In such case, the current rally would likely extend to retest 123.31 key resistance next. On the downside, below 110.27 will now argue short term topping, with mild bearish divergence condition in 4 hours MACD and bring pull back. But after all, we'll stay bullish as long as 105.64 support holds and expect stronger rally ahead.

In the bigger picture, the case of trend reversal in EUR/JPY is starting to build up and 97.03 should be a medium term bottom. Break of 111.57 will affirm this case and should at least push EUR/JPY for a test on 123.31 resistance. Break there will argue that whole down trend from 2008 high of 169.96 is completed and reversed. Though, failure to take out 123.31 and reversal from there will likely bring some sideway trading between 97.03/123.31 in medium term.
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