After yesterday’s comments of intervening for ‘maximum’ effect Japanese authorities have started their opening salvo for weakening the currency with Finance Minister Noda confirming an intervention in an emegrence press conference minutes after Yen pairs spiked. At the moment we have taken a pause and are waiting for the BoJ to comment on the move even as the monetart policy board begins a two day meeting. Note if Japanese authorities were serious in attaininng ‘maximum’ effect for their intervention we should be looking at the 80.00 handle as a key object otherwise failure to reach the level over the next few days may be taken as a sign of their ineffectiveness.

AUDUSD

Res: 1.0733/1.0789/1.0841

Sup: 1.0680/1.0653/1.0607

After the New York session turn-around we once again have AUDUSD dropping as we continue to view the commodity currencies as a sell on rallies. For Australia we have been seeing weaker economic numbers while the RBA is now more neutral in its policy stance. From indicators we have an oversold stochastic while macd is dropping. Intraday we are seeing similarly bearish setups with the 4H stochastic getting a new bear cross as macd’s drop while hourly charts see stochastic oversold and macd with a new bear cross. Consider shorts from just under 1.0733 or on a close below 1.0680.

EURJPY

Res: 112.24/112.77/113.52

Sup: 111.38/110.61/109.81

At the close EURJPY saw a piercing pattern from the daily charts while our current intervention driven spike has seen macd generate a bullish cross while stochastic is pushing higher. Note we are now back inside the daily EMA lines. Intraday our spike has seen hourly and 4H indicators also head higher with stochastic pushing further into overbought levels in both time frames. For now we are looking for a push to strong resistances at the 113.52 region.

GBPUSD

Res: 1.6439/1.6474/1.6513

Sup: 1.6388/1.6330/1.6261

Our broadening pattern in daily charts remain in effect as we look for a bearish reversal in the big picture. Indicators however are bullish overall with macd rising and stochastic seeing a new bullish cross this as we bounced off bullish EMA lines. In the 4H charts we have an overbought stochastic and bullish macd, hourly indicators see stochastic coming off overbought levels while macd is poised for a bear cross. For now we prefer taking the sell-side of GBPUSD from just under 1.6439 with tight stops at 1.6450. We continue to look forward for a trigger of the broadening pattern.

EURUSD

Res: 1.4384(90)/1.4455/1.4496

Sup: 1.4340/1.4282/1.4220

Attempts at a sharp pullback in EURUSD failed following the close of European markets as rumors on a possible QE3 program takes root. At the close we found EURUSD just under a bear channel resistance lines. Daily indicators now see macd’s heading with stochastic also crossing higher. Intraday we see a confluence of buys from the 4H indicators with candles suggesting momentum for the upside is building. Hourly charts are mixed with macd rising and stochastic seeing a new bear cross. Given proximity to a strong resistance area at 1.4384(90) and a rally mainly driven by rumors we prefer looking for a rejection from 1.4384(90) with tight stops at 1.4410. Alternative entry will be a close under 1.4340 for a sell-off to 1.4287.

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