Daily Currency Outlook: AUD/USD And USD/JPY : April 06,2018

AUD/USD Daily Outlook

Daily Pivots: (S1) 0.7678; (P) 0.7699; (R1) 0.7737;

Intraday bias in AUD/USD stays neutral as consolidation from 0.7642 temporary low is still in progress. Near term outlook stays bearish with 0.7784 resistance intact. On the downside, break of 0.7642 to will turn bias to the downside to extend recent fall from 0.8135 to retest 0.7500 key support level. On the upside, however, break of 0.7784 will suggest near term reversal and turn bias to the upside for 0.7915 resistance first.

In the bigger picture, medium term rebound from 0.6826 is seen as a corrective move. It might still extend higher but we’d expect strong resistance from 38.2% retracement of 1.1079 to 0.6826 at 0.8451 to limit upside to bring long term down trend resumption. On the downside, break of 0.7500 support will now be an important signal that such corrective rebound is completed. In that case, AUD/USD would be heading back to 0.6826 low in medium term.

USD/JPY Daily Outlook

Daily Pivots: (S1) 106.89; (P) 107.19; (R1) 107.6

USD/JPY’s rebound from 104.62 is still in progress. Intraday bias stays on the upside for 38.2% retracement of 114.73 to 104.62 at 108.48. Firm break there will add some credence to the case of trend reversal. And USD/JPY should target 61.8% retracement at 110.86 next. Nonetheless, rejection from 108.48 (which is close to 108.12 key resistance too), will retain bearish next. Break of 105.65 support will indicate that the rebound is completed and turn bias back to the downside for 104.62 and below.

In the bigger picture, medium term down trend from 118.65 (2016 high) is still in progress and extending. Build up in downside momentum argues that it might be extending the whole corrective pattern from 125.85 (2015 high). 100% projection of 118.65 to 108.12 from 114.73 at 104.20 will be a key level to watch as firm break there could bring downside acceleration. And in that case, 98.97 key support level (2016 low) would at least be breached. This bearish case will now be favored as long as 108.12 support turned resistance holds.

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