Daily Currency Outlook: USD/JPY And USD/CAD : May 11,2018

USD/JPY Daily Outlook

Daily Pivots: (S1) 108.85; (P) 109.10; (R1) 109.38;

USD/JPY is staying in consolidation below 110.02 short term top. Intraday bias remains neutral. Deeper pull back cannot be ruled out. But downside should be contained by 38.2% retracement of 104.62 to 110.02 at 107.95 to bring rally resumption. On the upside, break of 110.02 will resume the rise from 104.62 to 61.8% retracement of 114.73 to 104.62 at 110.86 next.

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 as 55 day EMA (now at 107.95) holds. Decisive break of 114.73 resistance will confirm our view and target 118.65 and above. However, sustained break of 55 day EMA will dampen this bullish view and turn focus back to 104.62 low instead.

USD/CAD Daily Outlook

Daily Pivots: (S1) 1.2794; (P) 1.2885; (R1) 1.2944;

Intraday bias in USD/CAD remains on the downside for deeper decline. As long as 1.2526 support holds, we’d still favor the bullish case that rebound from 1.2061 hasn’t completed. Above 1.2859 minor resistance will turn bias back to the upside for 1.2996 first. However, firm break of 1.2526 will resume the fall from 1.3124 to 1.2246 support and likely below.

In the bigger picture, current development suggests that rebound from 1.2061 has not completed yet. Focus is back on 38.2% retracement of 1.4689 to 1.2061 at 1.3065. Sustained trading above there will confirm medium term bullish reversal. That is, down trend from 1.4689 has completed at 1.2061 already. In that case, next target will be 61.8% retracement at 1.3685. However, break of 1.2526 support will dampen this bullish view again. And, focus will be back on 1.2061 key support level, which is close to 50% retracement of 0.9406 (2011 low) to 1.4689 (2015 high) at 1.2048

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