USD/JPY Daily Outlook
Daily Pivots: (S1) 109.99; (P) 110.22; (R1) 110.59;
USD/JPY’s rebound from 109.54 extends higher today but stays below 110.89. Intraday bias remains neutral first. On the upside, break of 110.89 will extend the rise from 108.10 towards 111.39. But we’d be cautious on strong resistance from there to limit upside. Corrective pattern from 111.39 could extend with another falling leg. Break of 109.54 will target 108.10 and possibly below. But, we’d expect strong support from 61.8% retracement of 104.62 to 111.39 at 107.20 to contain downside and bring rebound.
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) 1.3273; (P) 1.3302; (R1) 1.3340;
USD/CAD’s rally is still in progress even though upside momentum is diminishing as seen in 4 hour MACD. Intraday bias stays on the upside for 100% projection of 1.2246 to 1.3124 from 1.2526 at 1.3404 next. On the downside, below 1.3268 minor support will turn intraday bias neutral and bring consolidation first, before staging another rise.
In the bigger picture, current development solidify the view of bullish trend reversal. 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. This will now be the preferred case as long as 1.2526 support holds, even in case of deep pull back.
