Daily Currency Outlook: USD/JPY And USD/CHF : May 23,2018
ActionForex | May 23, 2018 05:05AM ET
Daily Pivots: (S1) 110.73; (P) 110.96; (R1) 111.13;
USD/JPY drops sharply to as low as 110.52 so far today but it’s staying above 110.02 resistance turned support so far. And it’s holding inside near term rising channel. Hence, intraday bias stays neutral and the consolidation from 111.39 should be relatively brief. Break of 111.39 will resume the rally from 104.62 to trend line resistance at 112.31. However, considering bearish divergence condition in 4 hour MACD, break of 110.02 will indicate short term topping. In that case, deeper pull back could be seen to 108.82 cluster support (38.2% retracement of 104.62 to 111.39 at 108.80) before completing the correction.
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 as108.80 support holds. Decisive break of 114.73 resistance will confirm our view and target 118.65 and above.
Daily Pivots: (S1) 0.9900; (P) 0.9945; (R1) 0.9973;
USD/CHF’s corrective decline from 1.0056 extends to as low as 0.9892 so far. Intraday bias remains mildly on the downside for deeper fall to trend line (now at 0.9817). We’d expect strong support from there to contain downside and bring rebound. On the upside, above 0.9956 minor resistance 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.
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