USD/CAD Daily Outlook
Daily Pivots: (S1) 1.2540; (P) 1.2581; (R1) 1.2619
USD/CAD lost some downside momentum as it’s pressing 61.8% retracement of 1.2246 to 1.3124 at 1.2581. But intraday bias stays on the downside as long as 1.2622 minor support holds. Sustained break of 1.2581 will pave the way to 1.2061/2246 support zone. On the upside, above 1.2622 will turn intraday bias neutral and bring recovery. But upside should be limited below 1.2814 support turned resistance and bring another fall.
In the bigger picture, current development turns favors to the case that rise from 1.2061 is a corrective three wave pattern. It could have completed at 1.3124 after hitting 38.2% retracement of 1.4689 to 1.2061 at 1.3065. Focus is now back on 1.2061 and 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048. Decisive break there will resume larger down trend from 1.4689 (2016 high) to 61.8% retracement of 0.9406 to 1.4689 at 1.1424.
USD/JPY Daily Outlook
Daily Pivots: (S1) 106.53; (P) 106.89; (R1) 107.13
USD/JPY is still staying in range below 107.48 and intraday bias remains neutral. On the downside, below 106.61 minor support will bring deeper fall to 105.65. Break of 105.65 support will indicate that the rebound from 104.62 is completed and target a test on 104.62 low. This will also retain medium term bearishness for down trend resumption later. On the upside, above 107.48 will extend the rebound to 38.2% retracement of 114.73 to 104.62 at 108.48 9 which is close to 108.12 and is crucial to determine the medium term outlook.
In the bigger picture, medium term down trend from 118.65 (2016 high) is still in progress and extending. Build up in downside momentum argues that it might be extending the whole corrective pattern from 125.85 (2015 high). 100% projection of 118.65 to 108.12 from 114.73 at 104.20 will be a key level to watch as firm break there could bring downside acceleration. And in that case, 98.97 key support level (2016 low) would at least be breached. This bearish case will now be favored as long as 108.12 support turned resistance holds.
