USD/CAD Daily Outlook
Daily Pivots: (S1) 1.3107; (P) 1.3158; (R1) 1.3192;
USD/CAD’s fall from 1.3385 resumed after brief recovery and breaks 1.3128. Intraday bias is back mildly on the downside. At this point, such decline is viewed as a correction. Downside should be contained by 1.3067 resistance turned support to bring rebound. Above 1.3224 minor resistance will turn bias to the upside for retesting 1.3385 first. However, firm break of 1.3067 will bring deeper decline to channel support (now at 1.2845).
In the bigger picture, as long as channel support (now at 1.2825) holds, we’ll 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.
USD/JPY Daily Outlook
Daily Pivots: (S1) 110.34; (P) 110.74; (R1) 110.97;
Break of 110.55 minor support argues that rebound from 108.10 might be finished at 111.13 already. Intraday bias is turned back to the downside for 109.36. Break will confirm that corrective pattern from 111.39 has started the third leg. And USD/JPY should target 108.10, and possibly below. In that case, we’d expect downside to be contained by 61.8% retracement of 104.62 to 111.39 at 107.20. On the upside, above 111.13 will bring retest of 111.39.
In the bigger picture, at this point, we’re slightly favoring the case that corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Above 111.39 will affirm this view and target 114.73 for confirmation. However, it should be noted that USD/JPY is bounded in medium term falling channel from 118.65 (2016 high). Sustained break of 61.8% retracement of 104.62 to 111.39 at 107.20 will likely resume the fall from 118.65 through 104.62 low.
