USD/JPY Daily Outlook
Daily Pivots: (S1) 109.39; (P) 109.74; (R1) 110.11;
Intraday bias in USD/JPY is turned neutral with the current recovery. On the downside, below 109.36 will resume the fall from 110.89 to 108.10 and possibly below. But as price actions from 111.39 are seen as a corrective pattern, we’d expect strong support from 61.8% retracement of 104.62 to 111.39 at 107.20 to contain downside and bring rebound. On the upside, above 110.89 will resume the rise from 108.10 towards 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.
USD/CHF Daily Outlook
Daily Pivots: (S1) 0.9868; (P) 0.9896; (R1) 0.9933;
Intraday bias in USD/CHF remains neutral for the moment. The consolidation pattern from 1.0056 could extend with another fall. Below 0.9855 will target 0.9787 support and below. But we’d expect strong support from 0.9720/4 cluster support (38.2% retracement of 0.9186 to 1.0056 at 0.9724, 100% projection of 1.0056 to 0.9787 from 0.9989 at 0.9720) to bring rebound. On the upside, above 0.9989 will bring retest of 1.0056 high first.
In the bigger picture, medium term decline from 1.0342 has completed with three waves down to 0.9186. Rise from there is currently viewed as a leg inside the long term range pattern. Hence, while further rally would be seen, we’d be cautious on strong resistance from 1.0342 to limit upside. For now, further rise is expected as long as 38.2% retracement of 0.9186 to 1.0056 at 0.9724 holds. However, sustained break of 0.9724 will dampen this bullish view and would at least bring deeper fall to 61.8% retracement at 0.9518.
