USD/CAD Daily Outlook
Daily Pivots: (S1) 1.2970; (P) 1.3003; (R1) 1.3030;
USD/CAD continues to lose downside momentum as seen in 4 hour MACD. Further fall could still be seen to 100% projection of 1.3385 to 1.3063 from 1.3289 at 1.2967 and possibly below. But we’d expect strong support from channel line (now at 1.2912) to complete the correction from 1.3385 and bring rebound. On the upside, firm break of 1.3095 resistance will turn bias to the upside for 1.3289 resistance.
In the bigger picture, as long as channel support (now at 1.2912) 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) 111.35; (P) 111.75; (R1) 112.11;
Intraday bias in USD/JPY is turned neutral as it retreats deeply after hitting 112.14. With 111.24 minor support intact, further rise is still in favor. Above 112.14 will target 113.17 resistance next. Firm break there will resume larger rally from 104.62 for 114.73 key resistance next. On the downside, below 111.24 minor support might extend the corrective fall from 113.17 with another decline. But 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.
