GPB/JPY And EUR/JPY Daily Outlook: August 20, 2013

Daily Pivots: (S1) 152.05; (P) 152.80; (R1) 153.42;

With 151.19 minor support intact, further rise could be seen as consolidation from 147.10 continues. But, the pattern from 147.10 is viewed as the second leg of the correction from 156.77 high. Strong resistance should be seen below 156.77 to bring reversal to start the third leg. Below 151.19 minor support will turn bias back to the downside for 147.10/61 support zone first.

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 a rebound, at least on first attempt. Overall, we'd still expect a rise from the 116.83 medium term bottom to resume later to a 163.05 resistance,and above after completing the correction.


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EUR/JPY

Daily Pivots: (S1) 129.62; (P) 130.32; (R1) 130.80;

Despite edging higher to 131.01, EUR/JPY lost momentum and retreated again. Intraday bias is neutral for the moment. Above 131.03 will bring another rise. Break of 131.96 should extend the choppy rebound from 124.95 to above 132.73. But we'd expect strong resistance below 133.80 to bring another fall to extend the consolidation from there. Meanwhile, below 129.41 minor support would bring deeper fall through 127.96 towards 124.95 support.

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 conditions in daily MACD. Consolidation from there 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 would be seen there, at least on initial attempt. But, break will target 61.8% retracement at 109.27. Nonetheless, considering the five wave structure of the rise from 94.11, we'd expect another medium term rally after completing the correction.


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