USD/JPY Daily Outlook
Daily Pivots: (S1) 110.79; (P) 111.02; (R1) 111.26;
Intraday bias in USD/JPY remains neutral for consolidation above 110.58 temporary low. As long as 111.53 minor resistance holds, correction from 113.17 could extend lower. Below 110.58 will turn bias to the downside. But we’d expect strong support from 38.2% retracement of 104.62 to 113.17 at 109.90 to bring rebound. On the upside, break of 111.53 will turn bias to the upside for retesting 113.17 high.
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.
USD/CAD Daily Outlook
Daily Pivots: (S1) 1.3041; (P) 1.3061; (R1) 1.3080;
Intraday bias in USD/CAD stays neutral for consolidation above 1.3023 temporary low. With 1.3114 minor resistance intact, deeper decline is still expected. Break of 1.3023 will target 100% projection of 1.3385 to 1.3063 from 1.3289 at 1.2967 and possibly below. But, we’d expect strong support from rising channel line (now at 1.2902) to contain downside and bring rebound. On the upside, above 1.3114 is the first sign of bottoming and will turn bias back to the upside for 1.3289 resistance. Overall, the larger rally from 1.2061 is expected to resume later.
In the bigger picture, as long as channel support (now at 1.2902) 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.
