Daily Currency Outlook: GPB/JPY And EUR/JPY
ActionForex | Aug 01, 2013 04:46AM ET
Daily Pivots: (S1) 148.26; (P) 148.88; (R1) 149.48;
The break of 148.77 support confirmed the bearish case. That is, fall from 154.04 is resuming whole corrective pattern from 156.77 as the third leg. Intraday bias remains on the downside for 147.10 first. Break will target 100% projection of 156.77 to 147.10 from 154.40 at 144.37. On the upside, above 150.92 minor resistance will turn bias neutral 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 rebound, at least on first attempt. Overall, we'd still expect whole rise from 116.83 medium term bottom to resume later to 163.05 resistance and above after completing the correction.
EUR/JPY Daily Outlook
Daily Pivots: (S1) 129.43; (P) 130.10; (R1) 130.88;
With 130.93 minor resistance intact, deeper decline is still expected in EUR/JPY. As noted before, rebound from 124.95 has completed at 132.73 already. Fall from 132.73 is viewed as the third leg of the consolidation from 133.80. Deeper decline should be seen to 128.01 support first. Break will confirm this bearish case and target 124.95 and below. On the upside, above 130.93 minor resistance will turn focus back to 132.73 resistance instead.
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 condition in daily MACD. Correction 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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