GBP/JPY Daily Outlook

Daily Pivots: (S1) 135.65; (P) 136.59; (R1) 137.33; More

With 4 hours MACD crossed below signal line, intraday bias in GBP/JPY is turned neutral and some sideway trading might be seen first. Nevertheless, downside should be contained by 134.37 support and bring another rise. Whole medium term rally from 126.73 is expected to continue further and above 137.52 will target 61.8% retracement of 145.94 to 126.73 at 138.60 and above.

In the bigger picture, with 145.94 resistance intact, we'd still favor that fall from 163.05 is not finished yet. Break of 130.82 support will indicate that corrective rebound from 126.73 is completed and the fall from 163.05 is resuming for a retest of 118.18 low. Break there will confirm that whole down trend from 2007 high of 251.09 has resumed for 61.8% projection of 215.87 to 118.81 from 163.05 at 103.06 next, which is close to 100 psychological level. However, break of 145.94 will indicate that fall from 163.05 is finished. Also, this will suggest that such fall is merely the second wave of the whole consolidation pattern from 118.81 and will bring another rise to 163.05 and above before resuming the longer term down trend.

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