Asian Session Notes

By @ibtimes on

We can no longer call it a short squeeze if traders have had ample time to get out of their positions so we find ourselves at a loss to find a descriptive for the way currency markets continue to dump the US dollar. Among the majors commodity currencies appear to be making the most of the risk appetite with Aussy and Kiwi now in between 21D and 34D EMA’s retaining much of their gains. Euro for its part continue to see a pattern of strength from the Aisa and European sessions that fizzle going to the US trade. Once again news out of the Eurozone has been dissapoint with the leveraging of EFSF a failure as EuroGroup managed to push things up only to 400 billion Euro’s a far cry from the 1 trillion that many in the market see as a minimun needed to fix the regions troubles. Early in Asia we appear to be getting more dollar dumping following a ratings downgrade for 7 US banks though we note this is just part of a broader banking review which saw other hlobal banks from elsewhere also downgraded. The only one’s gaining has been mainland banks and we have some questions over the new methodology that S&P is applying. For now we remain skeptical about the apparent risk appitte though cautious as well on when to short opting instead to stay in the sidelines.

AUDUSD

Res: 1.0069(77)/1.0115/1.0169

Sup: 0.9997/0.9929/0.9870

Aussy continued to rally Tuesday with prices now inside the daily EMA lines, between 21D and 34D EMA, though we face strong resistances at 1.0068(77) then 1.0115. Note commodity market are looking mixed. From indicators we have stochastic overbought while macd has just crossed higher. In the 4H picture we have macd rising and stochastic with a new bullish crossover heading for overbought levels. Hourly indicators for their part has mixed signals stochastic just crossing higher while macd is under the signal line. Immediate risk appears to be for a test of resistances but with a succession of strong levels at 1.0068(77) then 1.0115 and proximity of market prices we would prefer remaining sidelined may be look for shorts instead from the said prices going to the European session.

GBPUSD

Res: 1.5655/1.5681(89)/1.5721

Sup: 1.5585/1.5535/1.5489

Surprisingly GBPUSD managed to hold on to much of its gains despite coming from the tip of a triangle breakout. At the moment we have daily indicators looking bullish macd bottoming out and stochastic heading for overbought areas, note with string resistances at 1.5681(89) we have room to manuever up. From the lower time frames we have 4H charts with indecisive candles while macd is rising and stochastic has a bear cross. In the hourly picture we continue to have mixed signals with macd heading down while stochastic remains technically bullish though beginning to hook lower. At this point given all the mixed signals we prefer remaining sidelined. We may have room to manuever up to strong resistances but we lack a catalyst for such a move.

USDCHF

Res: 0.9242/0.9294/0.9329

Sup: 0.9180/0.9126/0.9084

We continue to see a bearish divergence in daily stochastic and have a new bear cross in macd for USDCHF though we can only use these daily indicators from under 0.9126 or well above 0.9126, perhaps 0.9300. From the candles Tuesday saw a hammer though intraday price action suggests a lack of momentum. In 4H charts we have macd’s heading lower and stochastic with a bear cross. Hourly indicators for their part are also showing sell signals. Immediate risk calls for a test of the key support area at 0.9126, any bears should have limited expectations with a move lower looking unlikely. We prefer looking for base building and a buy off the 0.9126 region.

EURUSD

Res: 1.3369/1.3421/1.3457

Sup: 1.3306/1.3271/1.3221

We have been seeing high wave doji’s in EURUSD for the past two days with daily indicators having a bullish bias though thus far Euro has been unable to hold on to its gains for long wicks in the end. At the moment we have daily macd bottoming out with stochastic continuing its push off oversold levels. In the lower time frames we are looking bullish with macd rising and stochastic hooking higher poised for a cross up. Hourly indicators has macd pushing higher while stochastic is also pushing for overbought levels. Note the past two days we have seen a pattern of Euro gains early in trading day from Asia to European open only to fizzle around midday going to the close of European markets. For now we are non-commital for the buy side though looking for a push once more to the 1.3421 strong resistance level and hoping for a rejection from the said price later in US trade.

NZDUSD

Res: 0.7684/0.7733/0.7790

Sup: 0.7601/0.7553/0.7515

Following monday upside gap at the open we have had Kiwi continue to rally with NZDUSD just above the 50 Fib level of our sell-off in the prior two weeks. From indicators we have daily stochastic overbought and macd crossing higher while prices are also just above the 21D EMA. In intraday charts we appear to be duplicating the bullish sentiment with 4H stochastic just pushing back to overbought levels while macd has been rising. In hourly charts we are technically in overbought levels for stochastic and macd higher than its signal though looking flat overall. At the moment we appear to be in the process of breaking higher past the 50 Fib area at 0.7644, a close above the level should pave the way for further gains perhaps a move to the string resistance at 0.7733.

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