GPB/JPY And EUR/JPY Daily Outlook: July 23, 2012

Daily Pivots: (S1) 120.93; (P) 121.74; (R1) 122.36

With 121.82 minor resistance intact, intraday bias in GBP/JPY remains on the downside for the moment. As noted before, rebound from 118.82 should have completed. Current decline should head to retest 118.82 first. Break will resume whole fall from 133.48 and target 116.83/117.29 support zone. On the upside, above 121.82 minor resistance will turn bias neutral and bring consolidations. But recovery should be limited below 123.79 and bring another decline.

In the bigger picture, there was so far no impulsive upside move after GBP/JPY formed a medium-term bottom at 116.83. On the other hand, there was no sustainable selling either. The development argues that even though there is no clear sign of trend reversal in GBP/JPY, it's more likely engaging in sideway consolidations, which corrects a fall from 163.05. That is, we'd probably see more range trading between 116.83 and 140.02 (50% retracement of 163.05 to 116.83 at 139.94) ahead, before an eventual downside breakout.
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GBP/JPY" title="GBP/JPY" width="675" height="440">
EUR/JPY Daily Outlook

Daily Pivots: (S1) 94.38; (P) 94.83; (R1) 95.42

EUR/JPY formed a temporary low at 94.23 and recovered. Intraday bias is turned neutral for some consolidations first. But upside of recovery should bel limited well below 97.37 minor resistance and bring fall resumption. Below 94.23 will target 61.8% projection of 111.43 to 95.64 from 101.62 at 91.86 next. Though, we'd be cautious on a bottoming signal as it approaches the 90 psychological level.

In the bigger picture, with 111.43 resistance intact, the downtrend from 2008 high of 169.96 is still in progress and could extend further lower to 90 psychological level. However, as we're favoring the case that pattern from 139.21 is a falling wedge with bullish convergence condition in weekly MACD. Fall from 111.43 should be the last leg in such pattern. Hence, we'll expect strong support above 88.96 to contain downside, form a major bottom and bring reversal. So, focus will be on reversal signal.
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EUR/JPY" title="EUR/JPY" width="675" height="440">