USD/JPY Daily Outlook
Daily Pivots: (S1) 112.15; (P) 112.35; (R1) 112.49;
Intraday bias in USD/JPY stays neutral as consolidation from 112.79 temporary top is in progress. Deeper retreat could be seen. But downside should be contained well above 111.13 resistance turned support to bring rally resumption. Current development affirms the case of medium term reversal. Above 112.79 will target 61.8% projection of 104.62 to 111.39 from 109.36 at 113.54 first. Break will put focus on 114.73 key resistance for confirming our bullish view.
In the bigger picture, current development, with the solid break of medium term channel resistance from 118.65 (2016 high), affirm our view that corrective fall from there has 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 now be the preferred case as long as 119.36 support holds.
USD/CHF Daily Outlook
Daily Pivots: (S1) 0.9942; (P) 0.9987; (R1) 1.0013;
USD/CHF’s pull back fro 1.0067 is still in progress. At this point, we’d still expect strong support from 4 hour 55 EMA (now at 0.9960) to contain downside and bring rebound. Above 1.0067 will extend larger rise from 0.9186 to 61.8% projection of 0.9186 to 1.0056 from 0.9787 at 1.0325, which is close to 1.0342 key resistance. However, sustained break of the 4 hour 55 EMA will dampen this bullish view and turn focus back to 0.9858 support instead.
In the bigger picture, rise from 0.9186 is seen as a leg inside the long term range pattern. After drawing support from 55 day EMA, it’s now resuming for 1.0342 key resistance. For now, we’d still cautious on strong resistance from there to limit upside. Meanwhile, break of 0.9787 support is needed to signal completion of the rise. Otherwise, outlook will remain bullish even in case of deep pull back.
