USD/CAD Daily Outlook
Daily Pivots: (S1) 1.2993; (P) 1.3037; (R1) 1.3079;
USD/CAD recovered after hitting 1.2993 and breached 1.3092 minor resistance. But there is no follow through buying so far. Intraday bias is turned neutral first. On the downside, below 1.2993 will resume the fall from 1.3385 to 100% projection of 1.3385 to 1.3063 from 1.3289 at 1.2967 and possibly below. But we’re still seeing the fall from 1.3385 as a correction. Hence, we’d expect strong support from channel line (now at 1.2907) to contain downside and bring rebound. On the upside, firm break of 1.3092 will turn bias to the upside for 1.3289 resistance.
In the bigger picture, as long as channel support (now at 1.2907) 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.
EUR/CHF Daily Outlook
Daily Pivots: (S1) 1.1552; (P) 1.1581; (R1) 1.1597;
Despite diminishing downside momentum, intraday bias in EUR/CHF stays on the downside for further 1.1478 support. As noted before, the corrective rebound from 1.1366 should have completed with three waves up to 1.1713 already. Break of 1.1478 will confirm our bearish view and target 1.1366 low and below. Nonetheless, on the upside, above 1.1637 minor resistance will turn bias back to the upside and could extend the rise from 1.1366. But even in that case, we’d expect strong resistance from 61.8% retracement of 1.2004 to 1.1366 at 1.1760 to bring near term reversal.
In the bigger picture, 1.2004 is seen as a medium term top with bearish divergence condition in daily and weekly MACD. 1.2000 is also an important resistance level. Hence, the corrective pattern from 1.2004 is expected to extend for a while before completion. We’re not anticipating a break of 1.2004 in near term. Another decline cannot be ruled out yet. But in that case, strong support should be seen at 1.1198 (2016 high), 61.8% retracement of 1.0629 to 1.2004 at 1.1154 to contain downside.
