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GBP/JPY Daily outlook


GBP/JPY's recovery from 202.50 continues today and some more sideway trading could still be seen. But still, consolidation from 202.50 should be relatively brief as long as 207.27 minor resistance holds. Below 202.50 will indicate recent decline has resumed for mentioned 119.78 target. Above 207.27 will indicate that a short top bottom is formed and bring stronger rebound to 4 hours 55 EMA (bow at 208.24) and above. But upside should be limited well below 211.58 resistance and bring fall resumption.

GBP/JPY august 18 2008
In the bigger picture, medium term rebound from 192.60 has completed at 215.87 after being limited below 100% projection of 192.60 to 208.99 from 199.78 at 216.17 as well as 55 weeks EMA, on bearish divergence condition in daily MACD. The three wave structure of rise from 192.60 to 215.87 is consistent with the view that it's merely a correction to the the medium term down trend from 241.35. Break of 199.78 support will confirm this case and bring retest of 192.60 low. On the upside, above 211.58 structure resistance is needed to indicate fall from 215.87 has completed. Otherwise, another decline is still expected even in case of strong rebound.


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