USD/JPY Daily Outlook
Daily Pivots: (S1) 112.23; (P) 112.55; (R1) 112.85;
At this point, USD/JPY is holding above 112.23 support despite breaching it. Intraday bias stays neutral first. On the downside, break of 112.23 support will extend the corrective pattern from 114.54 with deeper decline to 111.37 and below. On the upside, above 113.70 will target 114.20 resistance first. Break there will resume the rise from 111.37 and target 114.73 key resistance next. Overall, price actions 114.54 are seen as a consolidative pattern. In case of deeper fall, downside should be contained by 38.2% retracement of 104.62 to 114.54 at 110.75 to bring rebound. Larger rise from 104.62 is expected to resume later.
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.
USD/CAD Daily Outlook
Daily Pivots: (S1) 1.3406; (P) 1.3451; (R1) 1.3512;
USD/CAD’s rally resumed by breaking 1.3444 resistance and hits as high as 1.3496 so far. Intraday bias is back on the upside. Current rise is part of the up trend from 1.2061 and would target 1.3685 fibonacci level next. On the downside, below 1.3390 minor support will turn bias neutral and bring consolidations, before staging another rally.
In the bigger picture, up trend from 1.2061 (2017 low) is still in progress and should target to 61.8% retracement of 1.4689 (2016 high) to 1.2061 at 1.3685. However, such rise is not clearly impulsive yet. And it could be the second leg of the long term corrective pattern that started at 1.4689. Hence, even in case of further rally, we’d be cautious on loss of momentum and topping above 1.3685. Nevertheless, in any case, outlook will stay bullish as long as channel support (now at 1.2972) holds.
