USD/CAD Daily Outlook
Daily Pivots: (S1) 1.3131; (P) 1.3156; (R1) 1.3197;
With 4 hour MACD crossed above signal line, intraday bias in USD/CAD is turned neutral first. For now, the correction from 1.3385 is still in favor to continue. Below 1.3114 will target 1.3063 support and then 100% projection of 1.3385 to 1.3063 from 1.3289 at 1.2967. But we’d expect strong support from rising channel line (now at 1.2893) to contain downside and bring rebound. Larger rally from 1.2061 is expected to resume later.
In the bigger picture, as long as channel support (now at 1.2893) holds, we’re holding to the bullish view. That is, fall from 1.4689 (2015 high) has completed at 1.2061, ahead of 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. Further rally should be seen for 61.8% retracement of 1.4689 to 1.2061 at 1.3685 and above. However, sustained break of the channel support will argue that rise from 1.2061 has completed and will bring deeper fall to 1.2526 support to confirm.
USD/JPY Daily Outlook
Daily Pivots: (S1) 110.89; (P) 111.22; (R1) 111.68;
A temporary low is formed at 110.74 after breaching 111.50 minor resistance. Intraday bias in USD/JPY is turned neutral first. The corrective pattern from 113.17 short term top could extend with another decline. Below 110.74 will bring another fall. But in that case, downside should be contained by 38.2% retracement of 104.62 to 113.17 at 109.90 to bring rebound.
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.
