AUD/USD Daily Outlook
Daily Pivots: (S1) 0.7351; (P) 0.7372; (R1) 0.7400;
Intraday bias in AUD/USD is turned neutral again s with the current recovery. On the upside, break of 0.7408 minor resistance will indicate short term bottoming. In this case, stronger recovery could be seen to 4 hour 55 EMA (now at 0.7456) and above. But upside should be limited well below 0.7676 resistance to bring fall resumption. On the downside, break of 0.7346 will extend recent fall from 0.8135 to 0.7328 cluster support (61.8% retracement of 0.6826 to 0.8135 at 0.7326). Firm break of 0.7382 will target 61.8% projection of 0.8135 to 0.7411 from 0.7676 at 0.7229 next.
In the bigger picture, medium term rebound from 0.6826 is seen as a corrective move. Prior break of 0.7500 key support suggests that such correction is completed at 0.8135. Deeper decline would be seen back to retest 0.6826 low. In case of another rise, we’d expect strong resistance from 38.2% retracement of 1.1079 to 0.6826 at 0.8451 to limit upside to bring long term down trend resumption eventually.
USD/JPY Daily Outlook
Daily Pivots: (S1) 109.62; (P) 110.19; (R1) 110.55;
USD/JPY is staying in range of 109.54/110.89 and intraday bias remains neutral first. On the downside, below 109.54 will extend the corrective pattern from 111.39 with another falling leg to 108.10 and possibly below. But, we’d expect strong support from 61.8% retracement of 104.62 to 111.39 at 107.20 to contain downside and bring rebound. On the upside, above 110.89 will extend the rise from 108.10 towards 111.39. But we’d be cautious on strong resistance from there to limit upside.
In the bigger picture, at this point, we’re slightly favoring the case that corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Above 111.39 will affirm this view and target 114.73 for confirmation. However, it should be noted that USD/JPY is bounded in medium term falling channel from 118.65 (2016 high). Sustained break of 61.8% retracement of 104.62 to 111.39 at 107.20 will likely resume the fall from 118.65 through 104.62 low.
