GPB/JPY And EUR/JPY Daily Outlook: August 7, 2012
ActionForex | Aug 07, 2012 04:54AM ET
Daily Pivots: (S1) 121.47; (P) 122.32; (R1) 122.91
Near-term outlook remains neutral for the moment. On the upside, break of 123.77/79 resistance will confirm completion of the pull back from 125.82. More importantly, this will argue that whole rebound from 118.82 is resuming for 125.82 and above. On the downside, however, break of 120.82 will extend the decline from 125.82 to retest 118.82 low.
In the bigger picture, there was so far no impulsive upside move after GBP/JPY formed a medium-term bottom at 116.83. On the other hand, there was no sustainable selling neither. The development argues that even though there is no clear sign of trend reversal in GBP/JPY, it's more likely engaging in sideway consolidations, which corrects fall from 163.05. That is, we'd probably see more range trading between 116.83 and 140.02 (50% retracement of 163.05 to 116.83 at 139.94) ahead, before an eventual downside breakout.
EUR/JPY Daily Outlook
Daily Pivots: (S1) 96.53; (P) 97.17; (R1) 97.64
EUR/JPY's rebound fro 94.11 is still in progress and intraday bias remains on the upside for the moment. Break of trendline resistance (now at 97.73) will pave the way to retest 101.62 key resistance level next. However, reversal from the trendline resistance, followed by break of 94.92, will bring downtrend resumption for 90 psychological level instead.
In the bigger picture, the downtrend from 2008 high of 169.96 is still in progress and could extend further lower to 90 psychological level. However, as we're favoring the case that pattern from 139.21 is a falling wedge with bullish convergence condition in weekly MACD. Fall from 111.43 should be the last leg in such pattern. Hence, we'll expect strong support above 88.96 to contain downside, form a major bottom and bring reversal. So, focus will remain on reversal signal.
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