Daily Currency Outlook: GPB/JPY And EUR/JPY : August 25, 2015
ActionForex | Aug 25, 2015 06:35AM ET
Daily Pivots: (S1) 182.90; (P) 187.15; (R1) 191.07;
Intraday bias in GBP/JPY is turned neutral as the cross drew support from 61.8% retracement of 174.86 to 195.86 at 182.88 and recovered. More sideway consolidations would now be seen. So far, price actions from 195.86 are viewed as a consolidation pattern and we'll still expect strong support from 182.88 to contain downside. However, sustained break of 182.88 will open up bearishness in the cross and will bring deeper fall to 174.86 key support level.
In the bigger picture, the up trend from 116.83 is still in progress and would target 61.8% retracement of 251.09 to 116.83 at 199.80, which is close to 200 psychological level. Medium term momentum is not too convincing with bearish divergence condition in weekly MACD. We'd be cautious on medium term topping around 200 and bring a deep correction. Meanwhile, break of 174.86 will suggest that the trend has reversed earlier than we expect.
h2 EUR/JPY Daily Outlook/h2Daily Pivots: (S1) 138.42; (P) 138.71; (R1) 139.26;
Despite sharp dip to 135.95, EUR/JPY quickly recovered and intraday bias is turned neutral first. Choppy rise from 133.29 is viewed as a corrective move and could be the second leg of the pattern from 141.04. Hence, even in case of another rise, we'd be cautious on strong resistance from 141.04 to limit upside and bring another fall as the third leg. Break of 133.29 will now reverse trend and target 126.09 low.
In the bigger picture, price actions from 149.76 medium term top is viewed as corrective in nature. Strong rebound after failing to sustain below 38.2% retracement of 94.11 to 149.76 at 128.50 argues that it's developing into a sideway pattern. We'd expect more range trading between 126.09 and 149.76 in medium term. And that should then be followed by an upside breakout at a later stage. Nonetheless, decisive break of 126.09 would extend the correction towards 61.8% retracement at 115.36.
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