GPB/JPY And EUR/JPY Daily Outlook: June 5, 2012
ActionForex | Jun 05, 2012 07:03AM ET
Daily Pivots: (S1) 119.95; (P) 120.31; (R1) 120.85
GBP/JPY's consolidation from 118.82 is still in progress and more sideway trading could be seen. In case of stronger recovery, upside is still expected to be limited well below 124.64 resistance and bring fall resumption. Below 118.82 will extend the decline from 133.48 to retest 116.83/117.29 support zone next.
In the bigger picture, the corrective structure of the rebound from 116.83 to 133.48 indicates that downtrend from 2007 high of 251.09 is not finished yet. Break of 116.83 will resume such downtrend and target 110 psychological level first. Break will pave the way to the more important 100 level and possibly below. On the upside, break of 133.48 is needed to indicate medium term reversal. Otherwise, we'll stay bearish even in case of strong recovery.
EUR/JPY Daily Outlook
Daily Pivots: (S1) 97.12; (P) 97.56; (R1) 98.36
EUR/JPY's recovery from 95.64 temporary low is still in progress and stronger rise might be seen to 4 hours 55 EMA and above. But upside is expected to be limited by 100.20 resistance (38.2% retracement of 108.00 to 95.64 at 100.36) and bring fall resumption. Below 95.64 will target next projection level at 95.18 and then 90 psychological level.
In the bigger picture, break of 97.03 support last week confirmed resumption of the larger downtrend from 2008 high of 169.96. Current fall could target 61.8% projection of 123.31 to 97.03 from 111.43 at 95.18 and possibly further 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 below 95.18 to contain downside, form a major bottom and bring reversal. So, focus will be on reversal signal below 95.18.
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