Daily Currency Outlook: GPB/JPY And EUR/JPY
ActionForex | Aug 27, 2014 02:32AM ET
Daily Pivots: (S1) 171.94; (P) 172.25; (R1) 172.42;
With 171.60 minor support intact, further rise could still be seen. Recent development argues that price actions from 175.36 are developing into sideway consolidation only, rather than trend reversal. Rebound from 170.42 would extend to 174.21 resistance first. On the downside, though, below 171.60 minor support will turn bias back to the downside for 170.42 low instead.
In the bigger picture, the up trend from 116.83 (2011 low) continued to lose upside momentum. This could be seen in bearish divergence condition in daily MACD. And, weekly MACD continued to trend down. However, 169.53 structural support remains firmly intact and thus there is no confirmation of reversal yet. Another rally could still be seen. But in that case, we'd expect strong resistance below 50% retracement retracement of 251.09 to 116.83 at 183.96 to bring reversal. Meanwhile, sustained break of 169.53 support should confirm medium term topping and turn outlook bearish.
Daily Pivots: (S1) 136.87; (P) 137.14; (R1) 137.28;
EUR/JPY was rejected from 138.02 resistance and weakened. With 138.02 resistance intact, deeper decline is mildly in favor for 135.50 key support level. Decisive break there will carry larger bearish implications. Nonetheless, break of 138.02 will indicate near term reversal and turn outlook bullish for stronger rebound back to 139.27 resistance.
In the bigger picture, loss of upside momentum was seen in bearish divergence condition in weekly MACD. However, EUR/JPY is so far holding above 135.50 key support. Thus, there is no confirmation of trend reversal yet. Break of 145.68 will extend the up trend from 94.11 towards 76.4% retracement of 169.96 to 94.11 at 152.59 before topping. Meanwhile, break of 135.50 will confirm reversal and target 124.95 support.
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