GBP/JPY Mid-Day Outlook

Daily Pivots: (S1) 203.90; (P) 204.98; (R1) 206.61; More

GBP/JPY's recovery from 203.35 was limited at 206.09 and retreats from there. With 4 hours MACD staying below signal line, it argues that correction 208.99 might still be in progress. Intraday outlook is neutral for the moment. On upside, above 206.09 will reinforce the case that correction from 208.99 has completed and will bring retest of this resistance first. On the downside, though, below 203.35 will indicate deeper correction is underway and and will put 198.07 support back into focus.

Though, the overall outlook remains unchanged. Successive break of short term falling channel resistance and 205.09 resistance confirms that decline from 241.35 has already completed at 192.60. Further rally is expected to 210.56/211.22 resistance zone (100% projection of 192.60 to 205.09 from 198.07 at 210.56 and 38.2% retracement of 241.35 to 192.60 at 211.22).

In the bigger picture, while fall from 241.35 has completed at 192.60, there is no confirmation of the completion of whole down trend from 251.09 yet. Focus is now on the structure of the current rise from 192.60 as well as 219.32 medium term support turned resistance. Though, a break of 198.07 is now needed to shift short term bias back to the downside for retesting 192.60 low. Otherwise, further upside is still in favor, at least in short term.

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