Daily Currency Outlook: USD/JPY And GBP/USD: December 27, 2018

GBP/USD, Daily

Daily Outlook

Daily Pivots: (S1) 110.52; (P) 110.97; (R1) 111.82;

Intraday bias in USD/JPY is turned neutral with 4-hour MACD crossed above the signal line. The focus is back on 111.46 minor resistance. With 109.76 key support intact, break of 111.46 will revive near-term bullishness. In this case, intraday bias is turned back to the upside for 55 day EMA (now at 112.67) first. On the downside, below 110.13 will target 109.76 support.

USD/JPY, H4

In the larger picture, price actions from 125.85 (2015 high) are seen as a long-term corrective pattern. There is no change in this view. Apparently, such corrective pattern is not completed yet. A break of 109.76 support will start another medium term down leg to the 98.97/104.62 support zone. On the upside, break of 114.73 resistance will likely extend the rise from 98.97 through 118.65 resistance.

USD/JPY, Daily

Daily Outlook

Daily Pivots: (S1) 1.2603; (P) 1.2662; (R1) 1.2692;

No change in GBP/USD’s outlook as it’s staying in consolidation from 1.2476. A stronger recovery cannot be ruled out. The upside should be limited by 1.2811 resistance to bring decline resumption. On the downside, break of 1.2476 will extend the larger down trend from 1.4376 to 61.8% projection of 1.4376 to 1.2661 from 1.3174 at 1.2114. However, a firm break of 1.2811 will be an early signal of a trend reversal and turn the focus back to 1.3174 resistance.

GBP/USD, H4

In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA. The structure and momentum of the fall from 1.4376 argue that it’s resuming long-term downtrend from 2.1161 (2007 high). And this will now remain the preferred case as long as 1.3174 structural resistance holds. GBP/USD should now target a test on 1.1946 first. A decisive break there will confirm our bearish view.

GBP/USD, Daily

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