USD/JPY Mid-Day Outlook

Daily Pivots: (S1) 109.84; (P) 110.25; (R1) 110.88; .

USD/JPY s consolidation from 110.66 continues into US session. As mentioned before, bearish divergence condition in 4 hours MACD and RSI argues that a short term top might be around the corner, if not formed. Nevertheless, intraday bias remains mildly on the upside as long as 109.55 minor support holds and USD/JPY could still rise further to mentioned 61.8% projection of 95.77 to 108.58 from 103.76 at 111.68. Below 109.55 will confirm that a short term top is in place and bring deeper pullback to 108.36 and below. Though, downside should be contained above 106.04 support and bring rally resumption.

In the bigger picture, USD/JPY has made a medium term bottom after down trend from 124.13 has just met 76.4% retracement of 79.75 to 147.68 at 95.78. Rebound from 95.77 is still in progress and should be targeting 61.8% projection of 95.77 to 108.58 from 103.76 at 111.68 first. Break will bring further rise to 61.8% retracement of 124.13 to 95.77 at 113.30. On the downside, a break of 103.76 support is needed to indicate rise from 95.77 has completed. Otherwise, further rally is still expected after consolidation.

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USD/CHF Mid-Day Outlook

Daily Pivots: (S1) 1.0920; (P) 1.0964; (R1) 1.1003;

USD/CHF recovers mildly but after all it s still struggling around mentioned 1.0999/1028 region. Bearish divergence condition in 4 hours MACD and RSI argues that a short term top around the corner, if not already in place. Break of 1.0832 minor support will confirm and bring deeper pull back to 1.0623 cluster support (38.2% retracement of 1.0010 to 1.1007 at 1.0626). But downside should be contained above 1.0403 support and bring rally resumption.

Though, note that before breaking of 1.0832 minor support, there is no confirmation of a short term top yet. Further rally cannot be ruled out and sustained trading above 1.0999/1028 will pave the way for next key medium term resistance at 1.1596.

In the bigger picture, the case that whole medium term down trend from 1.3283 has completed continues to build up with weekly MACD and RSI breaking their own down trend. Nevertheless, focus remains on the mentioned cluster resistance at 1.0999/1028 (100% projection of 0.9634 to 1.0623 from 1.0010 at 1.0999, 38.2% retracement of 1.3283 to 0.9634 at 1.1028). Sustained break of this resistance zone will indicate that whole rise from 0.9634 is possibly impulsive in nature and should target next cluster resistance at 1.1596 (161.8% projection of 0.9634 to 1.0623 from 1.0010 at 1.1610). On the downside, a break below 1.0010 support is still needed to confirm rise from 0.9634 has finished. Otherwise, further rally is still in favor after pullback.

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