Daily FX: GPB/JPY And EUR/JPY : May 09, 2014
ActionForex | May 09, 2014 04:59AM ET
Daily Pivots: (S1) 171.69; (P) 172.27; (R1) 172.68;
Intraday bias in GBP/JPY remains neutral for the moment. The cross is still staying in medium term consolidation pattern from 174.84. Thus, in case of another rally, we'd expect strong resistance below 174.84 to limit upside to bring reversal and start another falling leg inside the pattern. Break of 171.25 support will turn near term outlook bearish for 169.50 support and below.
In the bigger picture, the up trend from 116.83 (2011 low) might still extend to above 174.84. Nonetheless, upside momentum is rather unconvincing as seen in weekly MACD. Thus, even in that case, we'd expect strong resistance from 50% retracement retracement of 251.09 to 116.83 at 183.96 to limit upside. Meanwhile, sustained break of 163.87 support should confirm medium term topping at 174.84 and bring deeper correction to 147.61/156.77 support zone next.
Daily Pivots: (S1) 140.02; (P) 141.19; (R1) 141.86;
Intraday bias in EUR/JPY remains neural as choppy sideway trading continues in range of 140.07/143.47. Price actions from 145.68 are viewed as forming a consolidation pattern with rise from 136.22 as the second leg. Break of 140.07 will revive that case that such second leg has completed. In such case, outlook will turn bearish as the third leg should have started for 136.22 support and below. Above 143.47 will extend the second leg but in that case, we'd expect strong resistance below 145.68 to limit upside and bring reversal.
In the bigger picture, loss of upside momentum was seen in bearish divergence condition in daily and 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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