USD/CAD Daily Outlook
Daily Pivots: (S1) 1.3016; (P) 1.3058; (R1) 1.3123;
USD/CAD’s breach of 1.3091 suggests minor resistance suggests that fall from 1.3173 is possibly completed at 1.2986 already. More importantly, the rebound head of medium term channel support saves bullishness in the pair. Intraday bias is turned back to the upside for 1.3173 resistance. Break there will indicate completion of fall from 1.3385 and turn outlook bullish again. However, sustained trading below the channel support (now at 1.2982) will carry larger bearish implication and turn outlook bearish.
In the bigger picture, as long as channel support (now at 1.2982) 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. Further decline should be seen to 38.2% retracement of 1.2061 to 1.3385 at 1.2879 first. Sustained break will pave the way to 61.8% retracement at 1.2567 and below.
USD/JPY Daily Outlook
Daily Pivots: (S1) 110.77; (P) 111.04; (R1) 111.57;
USD/JPY’s rebound from 109.76 extends to as high as 111.48 so far. Break of 111.42 minor resistance argues that the correction from 113.17 has completed at 109.76 already. Intraday bias is back on the upside for 112.14 first. Break will bring retest of 113.17 high. On the downside, below 110.74 minor support will turn bias back to the downside for retesting 109.76 again. But after all, we’d continue to expect strong support around 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. However, decisive break of 109.36 will mix up the outlook again. And deeper fall should be seen back to 61.8% retracement of 104.62 to 113.17 at 107.88 and below.
