USD/JPY Daily Outlook
Daily Pivots: (S1) 109.13; (P) 109.52; (R1) 109.80;
USD/JPY weakens again today but near term outlook remains unchanged. We’d continue to expect strong support from 108.82 cluster support (38.2% retracement of 104.62 to 111.39 at 108.80) to contain downside and break rebound. Above 109.82 minor resistance will argue that the pull back from 111.39 is completed. Intraday bias would be turned back to the upside for retesting 111.39. However, on the downside, firm break of 108.82 will argue that the rise from 104.62 is possibly over. Deeper would then be seen to 61.8% retracement at 107.20 and possibly below.
In the bigger picture, corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Rise from 104.62 is possibly resuming the up trend from 98.97 (2016 low). This will be the preferred case as long as108.82 support holds. Decisive break of 114.73 resistance will confirm our view and target 118.65 and above. However, sustained break of 108.82 will dampen the bullish outlook and revive the case of a break of 104.62 low before bottoming.
USD/CHF Daily Outlook
Daily Pivots: (S1) 0.9905; (P) 0.9931; (R1) 0.9963;
Intraday bias in USD/CHF remains neutral at this point. Focus stays on 0.9977 minor resistance. Break there will argue that corrective pull back from 1.0056 has completed already. Intraday bias will then be turned back to the upside for retesting 1.0056 high first. In case of another fall, we’d expect strong support from trend line (now at 0.9848) to contain downside and bring rebound. However, sustained break of the trend line will argue that it’s a larger scale correction and will target 0.9724 fibonacci level.
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.
