Daily Currency Outlook: EUR/JPY And GBP/JPY : May 17,2018

EUR/JPY Daily Outlook

Daily Pivots: (S1) 130.33; (P) 130.74; (R1) 131.05;

EUR/JPY rebounded strongly ahead of 129.22 support and intraday bias is turned neutral first. Near term outlook stays bearish with 131.36 resistance intact and deeper decline is expected. Below 129.22 will target 128.94 first. Break there will resume the corrective fall from 137.49 and target 61.8% projection of 137.49 to 128.94 from 133.47 at 128.18, and possibly further to 126.61 medium term fibonacci level.

EUR/JPY 4 Hour Chart

In the bigger picture, for now, price actions from 137.49 are viewed as a corrective pattern only. Hence, while deeper decline would be seen, strong support is expected at 38.2% retracement of 109.03 to 137.49 at 126.61 to contain downside and bring rebound. Up trend from 109.03 (2016 low) is expected to resume afterwards. Though, sustained break of 126.61 will be an important sign of trend reversal and will turn focus to 124.08 resistance turned support.

EUR/JPY Daily Chart

GBP/JPY Daily Outlook

Daily Pivots: (S1) 148.34; (P) 148.76; (R1) 149.34;

GBP/JPY’s recovery from 147.03 resumed by taking out 149.29 minor resistance. Further rise could be seen. But still, such choppy rise is seen as a correction. Hence, upside should be limited below 150.60 support turned resistance to bring fall resumption eventually. On the downside, below 148.16 will likely resume the decline from 153.84 through 147.04 to 144.97 low. Break there will resume the fall from 156.59 and target 100% projection of 156.59 to 144.97 from 153.84 at 142.22 next.

GBP/JPY 4 Hour Chart

In the bigger picture, for now, we’re treating price actions from 156.59 as a corrective move. Therefore, while deeper fall is expected, strong support should be seen above 139.29 cluster support (50% retracement of 122.36 to 156.59 at 139.47) to contain downside and bring rebound. There is still prospect of extending the rise from 122.36. However, considering that GBP/JPY failed to sustain above 55 month EMA (now at 153.94), firm break of 139.29 will confirm trend reversal and turn outlook bearish.

GBP/JPY Daily Chart

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