forexlion

GBP/JPY Weekly Outlook


March 15,2008


GBP/JPY's down trend resumed last week and dived to as low as 199.85., meeting mentioned target of 200 psychological support. At this point, there is no sign of reversal yet. Initial bias remains on the downside this week as long as 202.32 minor resistance holds. Further decline should be seen to 100% projection of 213.48 to 203.47 from 207.97 at 196.96 first. Above 202.32 will turn intraday outlook consolidative first. But another fall is still expected as long as recovery is limited below 205.04 resistance.
In the bigger picture, an important medium term top is formed at 251.09 after completion of a medium term head and should top pattern (ls: 241.47, h: 251.09, rs: 241.35), with the medium term trend line support taken out too. In other words, the whole up trend from 148.19 should have ended at 251.09 already and deeper medium term decline could be seen towards the rising trend line support (now at 174.16).
On the upside, above 205.04 will argue that fall from 241.35 has at least made a short term low. Some sideway consolidation could be seen with risk of rebound to 213.48 resistance or above. But still, medium term outlook remains bearish as long as 219.32 support turned resistance holds.

EUR/USD Weekly Outlook

March 15, 2008


EUR/USD up trend continued last week and extended further to as high as 1.5687 to close the week strongly. From a short term angle, initial bias remains on the upside this week as long as 1.5531 minor support holds. The current rise from 1.4438 is expected to extend to next short term target of 100% projection of 1.3360 to 1.4966 from 1.4438 at 1.6044.
On the downside, below 1.5531 will turn intraday outlook consolidative first and bring pull back towards 4 hours 55 EMA (now at 1.5395). But consolidation should be relatively brief as long as downside is contained above 1.5277 support. Though, note that touching of 1.5277 support will indicate that a short term top is formed with bearish divergence condition in 4 hours MACD and RSI and bring lengthier consolidation.
In the bigger picture, medium term up trend from 1.1639 is still in progress. Regardless of internal structure, it is treated as resumption of long term up trend from 0.8223 (00 low) to 1.3668 (04 high). Further medium term rally could be seen towards 100% projection of 0.8223 to 1.3668 from 1.1639 at 1.7084. Break of 1.4591 resistance turned support is needed to indicate that a medium term top is in place. Otherwise, medium term outlook remains bullish.