Asian Session Notes

By @ibtimes on

Friday’s candles were interesting that they actually suggested a loss of bearish momentum for the major currency pairs. In Euro we had a highwave doji, for Cable a piercing pattern, and Aussy a spinning top all againt the dollar. This as after a week of volatility and sell-off we found equitiy markets managing to close the day in plus territory in the US. Despite this however we would point out that critical supports were successfully broken the past week to suggest new downlegs for the daily charts are the main focus as we see little resolution of the European debt crisis. Over the weekend once again we were dissapointed by the commentaries coming out of Europe with officials now acknowledging that domestic issues were beginning to take precedence over regionwide efforts to stabilize conditions. Looking forward this is a critical week for the commoditiy currencies with Manufacturing PMI numbers set for release Friday. In what could be an ominous sign, the Chinese have opted to move the release of their Manufacturing OMI’s official figures to Saturday instead of the usual same day with Europe’s and that of the US.

EURJPY

Res: 103.30/103.88/104.34

Sup: 102.21/101.60/100.85

Friday saw a failed attempt at generating a piercing pattern with markets already dumping EURJPY from the open in Wellington. Daily indicators has macd dropping while stochastic is at risk of a bear cross. Intraday we have macd topping off in the 4H picture while stochastic has come-out of overbought areas. In hourly charts we have a confluence of bears as macd beginning to cross lower while stochastic heads for oversold levels. Note we have had a quick sell-off over the last 4 hours that we prefer looking for shorts only after a small bounce, possibly from just under 103.30 for a retest of the 102.21 threshold.

GBPUSD

Res: 1.5500/1.5578/1.5644

Sup: 1.5422/1.5375/1.5340

We actually saw a piercing pattern from daily candles with the Friday close though overall bias remains for the short side of the market. Note we have daily stochastic pointing up while macd is bearish, the next key support area is at 1.5340 beneath which will be prices unseen for more than a year. In the 4H level we have stochastic with a bear cross while macd is pointing up candles themselves saw a bearish engulfing. In hourly charts we have hourly macd’s just crossing lower while stochastic is also heading for oversold levels. With a strong immediate resistance we prefer taking the sell side of the market despite the daily piercing pattern. Consider shorts coming from just under 1.5500 or on a close below 1.5422 for a test of the key support level at 1.5340.

EURUSD

Res: 1.3458/1.3542/1.3590

Sup: 1.3384/1.3344/1.3270

Friday’s close gave us an indecisive high wave spinning top with prices remaining under the key 1.3590 break out point. Among indicators we have daily stochastic crossing lower once more heading to oversold areas while macd has been bearish for sometime. Moving to the lower time frames we are seeing a confluence of bears from the 4H and hourly picture with stochastic and macd’s seeing new bear crosses. We have already covered Friday’s range in the brief time since the Wellington open with prices currently just above last weeks lows. We prefer getting shorts from just under 1.3542, 38.2 Fib of last weeks decline for a rest of the 1.3384 area. Alternatively an hourly close under 1.3384 may herald the next down-leg.

AUDUSD

Res: 0.9810/0.9865/0.9929

Sup: 0.9734/0.9688/0.9572

Friday saw a high spinning top in Aussy to suggest a loss of bearish momentum. Indicators however continue to suggest a drop as daily stochastic remain oversold and macd is opening lower. Note weekly charts also remain bearish with the key support in AUDUSD still well below market prices at 0.9381. From the lower time frames we have 4H stochastic rising a new bullish cross from macd, candles are seeing indecisive trading inside a ranging market. Hourly indicators are mixed with stochastic crossing lower while macd remains above the signal line. At the moment we are stuck in a range play despite the bearish bias from the big picture. As such we prefer looking for shorts from under the congestion resistance at 0.9866 stops tightly at 0.9875. For now avoid bearish breakouts unless fresh catalyst for a bear market is seen.

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