In the end we saw a long wick from EURUSD, as demand for Euro’s following the EURCHF fix tapered off in the face of a weaker equity market. At the close we find EURUSD under 1.4072 to suggest we are vulnerable for a dip to the 1.3822 area over the next few days. From the indicators we have daily stochastic oversold and macd dropping. Intraday we are seeing mixed signals between the time frames. Hourly indicators are bullish with stochastic overbought and macd crossing up while in 4H charts we have stochastic oversold and macd technically bearish. For now we prefer looking for a rejection from 1.4072, the floor for much of the wide range play over the last 3-months.
We have USDJPY just under the August congestion resistance highs at 77.70 with the 55D EMA just above the said level. Indicators show macd and stochastic heading higher. From the 4H level we have a dark cloud cover among the candles, while stochastic is overbought as prices remain under resistances and macd is rising. In the hourly level we have stochastic oversold while macd is also crossing lower. Given the increased militancy from the CB’s, e.g. SNB’s fixing EURCHF, and the Monetary Policy Statement and press conference by the BoJ later on we favor looking for a weaker Yen. Consider buys from 76.70 best 76.50. or a sell stop above yesterdays highs, above the August congestion resistance.
Daily candles has AUDJPY with a bullish engulfing from yesterday though prices are once more inside the daily EMA lines suggesting we may have difficulty generating a follow through rally. Indicators for the moment has a confluence of buys macd flat above the signal while stochastic coming out of oversold levels. From the lower time frames we have a confluence of buys between hourly and 4H macd and stochastic, with the latter seeing a hammer following Tuesday’s turnaround. Note we have a lot of issues possibly moving AUDJPY today from Australia we are looking for a bounce in GDP numbers to 1.0% while in Japan we have a Monetary Policy Statement with a BoJ press conference. Best case scenario we get jawboning from the BoJ a long with strong reads from Australia could see us pushing for the previous weeks highs at 82.82.
In the end Aussy saw a high wave spinning top though we remain below the daily EMA lines and the 1.0600, strong resistance level. From indicators we have daily stochastic in oversold levels while macd is at risk of crossing lower. Intraday we have 4H indicators mixed with stochastic crossing higher while macd remains under the signal line. Hourly indicators are seeing a confluence of buys from stochastic and macd. Immediate risk is for prices to test the strong resistances at at 1.0600, note we have the daily EMA lines clumped just under that 1.0600 resistance area though we prefer a sell on rallies approach. For now we prefer remaining sidelined with GDP up for release at 0130GMT with consensus forecast calling for a bounce by 1.0% after the previous quarters contraction of 1.2%.
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