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

Daily Pivots: (S1) 126.63; (P) 127.08; (R1) 127.38

GBP/JPY rebounded strongly after drawing support from 4 hours 55 EMA but it's kept below 128.20 resistance. Intraday bias remains neutral. Break of 128.20 will suggest that consolidation from 128.28 is already completed and rise from 118.82 is finally resuming. In such case, bias will be back to the upside for 128.20 and then 133.48 resistance next. In case of another fall, we'd expect strong support from the lower channel line (now at 124.15) to contain downside and bring rebound.

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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EUR/JPY Daily Outlook

Daily Pivots: (S1) 103.53; (P) 103.99; (R1) 104.85

Intraday bias in EUR/JPY remains on the upside and current rise is expected to continue to 61.8% retracement of 111.43 to 94.11 at 104.81 and then 111.43 key resistance. On the downside, break of 103.12 minor support is needed to signal short term topping. Otherwise, we'll stay bullish even in case of retreat.

In the bigger picture, we're favoring the case that whole down trend from 169.96 (3008) has completed at 94.11 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 100.14 support holds. Though, considering that EUR/JPY can't take out 55 weeks EMA decisively yet, break of 100.14 will favor another low below 94.11 instead. EUR/JPY H4" title="EUR/JPY H4" width="600" height="600">
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