GPB/JPY And EUR/JPY Currency Outlook: July 31, 2014
ActionForex | Jul 31, 2014 04:45AM ET
Daily Pivots: (S1) 173.10; (P) 173.65; (R1) 174.40;
GBP/JPY's strong rebound argues that the pull back from 175.36 could have completed at 172.60 already, after drawing support from 55 days EMA. But it's staying below 174.54 minor resistance for the moment. Intraday bias stays neutral first. Break of 174.54 will turn bias back to the upside for 175.36 and break will extend the larger up trend. On the downside, sustained break of 172.36 support will confirm near term reversal and will turn outlook bearish for 170.95 support next.
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. There is no clear sign of reversal yet but a medium term top should be near. So, in case of another rise, 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) 137.06; (P) 137.46; (R1) 138.08;
The breach of 137.71 minor resistance indicates that a short term bottom is formed at 136.36 on bullish convergence in 4 hours MACD. Intraday bias is turned back to the upside for 139.27 resistance first. Break there will confirm completion of the choppy fall from 143.78 and will turn near term outlook bullish. On the downside, below 136.83 minor support will turn bias back to the downside for 135.50 key support level.
In the bigger picture, loss of upside momentum was seen in bearish divergence condition in weekly MACD. However, the 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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