USD/JPY Daily Outlook
Daily Pivots: (S1) 111.85; (P) 112.29; (R1) 112.63;
USD/JPY breached 112.01 minor support briefly and quickly recovered. Intraday bias is turned neutral first. On the upside, above 112.71 will extend the rebound from 111.62 to retest 114.54 high. On the downside, below 111.62 will resume the correction from 114.54 to 38.2% retracement of 104.62 to 114.54 at 110.75. We’ll look for bottoming signal above 109.76 key support in that case.
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 109.76 support holds. However, decisive break of 109.76 will dampen this bullish view and turns outlook mixed again.
GBP/USD Daily Outlook
Daily Pivots: (S1) 1.2977; (P) 1.3055; (R1) 1.3093;
The strong break of 1.3081 minor support indicates resumption of fall from 1.3257. Intraday bias is turned back to the downside for 1.2921 support first. Firm break there will bring retest of 1.2661 low. Overall, price actions from 1.2661 are viewed as a corrective pattern. IN case of another rise, upside should be limited by 1.3316 key fibonacci level to bring down trend resumption eventually.
In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA. The structure and momentum of the fall from 1.4376 argues that it’s resuming long term down trend. And this will be the preferred case as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. However, firm break of 1.3316 would bring stronger rebound to 61.8% retracement at 1.3721. And, the eventual depth of the fall from 1.4376, and the chance of hitting 1.1946 low, will depend on the strength of the interim corrective rebound from 1.2661.
