AUD/USD Daily Outlook
Daily Pivots: (S1) 0.7339; (P) 0.7360; (R1) 0.7388
A temporary top is in place at AUD/USD at 0.7381 and intraday bias is turned neutral first. As long as 0.7295 minor support holds, rebound from 0.7201 short term bottom could still extend high. But we’d expect upside to be limited by 0.7425 resistance to bring larger down trend resumption. On the downside, below 0.7295 minor support will argue that the rebound is finished and turn bias back to the downside for retesting 0.7201 low.
In the bigger picture, rebound from 0.6826 (2016 low) is seen as a corrective move that should be completed at 0.8135. Fall from there would extend to have a test on 0.6826. There is prospect of resuming long term down trend from 1.1079 (2011 high). But we’ll look at downside momentum to assess at a later stage. On the upside, break of 0.7452 resistance, however, will indicate medium term bottoming, on bullish convergence condition in daily MACD. In that case, a correction should be seen first, with stronger rebound would be seen to 38.2% retracement of 0.8135 to 0.7201 at 0.7558. The down trend from 0.8135 will resume after the correction completes.
USD/JPY Daily Outlook
Daily Pivots: (S1) 109.84; (P) 110.20; (R1) 110.62
Intraday bias in USD/JPY remains neutral as it drew support from 38.2% retracement of 104.62 to 113.17 at 109.90 and recovered. At this point, we’d still expect strong support around 109.90 to bring rebound. On the upside, above 111.42 will turn bias back to the the upside for retesting 113.17 first. However, sustained break of 109.90 will put 109.36 key support level in focus. Break of 109.36 will carry larger bearish implications.
In the bigger picture, corrective fall from 118.65 (2016 high) should have completed with three waves down to 104.62. Decisive break of 114.73 resistance will likely resume whole rally from 98.97 (2016 low) to 100% projection of 98.97 to 118.65 from 104.62 at 124.30, which is reasonably close to 125.85 (2015 high). This will stay as the preferred case as long as 109.36 support holds. However, decisive break of 109.36 will mix up the outlook again. And deeper fall should be seen back to 61.8% retracement of 104.62 to 113.17 at 107.88 and below.
