USD/JPY Daily Outlook
Daily Pivots: (S1) 110.49; (P) 110.70; (R1) 111.05;
USD/JPY drew strong support from 4 hour 55 EMA and rebounds sharply. Focus is turned back to 111.13 minor resistance. Break there will target 111.39 first. Based on current momentum, firm break of 111.39 will resume the larger rally from 104.62 to 114.73 key resistance next. On the downside, below 110.27 will turn bias to the downside for 109.36 first.
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.
USD/CAD Daily Outlook
Daily Pivots: (S1) 1.3069; (P) 1.3099; (R1) 1.3141;
USD/CAD breached 1.3067 but quickly recovered. Intraday bias remains neutral first. At this point, we’d still expect strong support around 1.3067 resistance turned support to complete the correction from 1.3385 to bring rebound. On the upside, above 1.3159 minor resistance will flip bias back to the upside for retesting 1.3385. However, firm break of 1.3067 will bring deeper fall to channel support (now at 1.2825).
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. 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.
