GPB/JPY And EUR/JPY Daily Outlook: October 1, 2012

Daily Pivots: (S1) 125.40; (P) 125.81; (R1) 126.18

With 126.69 minor resistance intact, the pull back from 128.82 might extend lower. But still, downside is expected to be contained by 124.41 support and bring rebound. Above 126.69 minor resistance will flip bias back to the upside. Break of 128.82 will extend the whole rally from 118.82 to 133.48 resistance next. Though, break of 124.41 will dampen our bullish view and turn focus back to 120.82 support instead.

In the bigger picture, at this point, we'd like to maintain that price actions from 116.83 (2011 low) are corrective in nature so far. Rise from 118.82 could be the third leg of the pattern from 116.83 and might target 133.48 and above. But this is far from being certain. After all, the likely scenario is that we'll 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. We'll favor this view as long as 140.02 resistance holds.
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GBP/JPY" title="GBP/JPY" width="1148" height="733">
EUR/JPY Daily Outlook

Daily Pivots: (S1) 99.76; (P) 100.06; (R1) 100.48

The pull back from 103.86 might continue but at this point, we'd still expect downside to be contained by 99.52 and bring rise resumption eventually. Above 101.04 will flip bias back to the upside first. Break of 103.86 will extend the rally from 94.11 to 103.86 and above. Though, break of 99.52 will indicate reversal and will turn focus back to 97.98 support for confirmation.

In the bigger picture, we're favoring the case that whole down trend from 169.96 (3008) has completed at 99.11 already, on bullish convergence condition in weekly MACD. Focus is now on 111.43 key resistance level. Break will confirm this bullish case and bring further medium term rise to 123.31 and above (38.2% retracement of 169.96 to 94.11 at 123.08). And, we'd favor this bullish scenario as long as 99.52 support holds. Though, considering that EUR/JPY can't take out 55 weeks EMA decisively yet, break of 99.52 will favor another low below 94.11 instead.
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EUR/JPY" title="EUR/JPY" width="1148" height="733">