Given the strong close in New York markets we expect Asian trade to be similarly positive despite the weaker than expected numbers seen earlier out of Japan with Preliminary GDP q/q at -0.9% against the -0.5% consensus with prior numbers seeing a downside adjustment to -0.8%. For now we see currencies poised for further gains though the Yen crosses are still capped by their daily EMA lines.
We see USDJPY trying to push past the daily EMA lines with a pattern of higher highs and higher lows while macd is rising and stochastic pushing further into overbought levels. Looking at 4H charts we have a confluence of buys from the indicators stochastic already overbought, note we are also well above the EMA lines. In the hourly picture we have stochastic coming off overbought levels while macd is heading higher. Given the bigger picture we prefer holding on to buys in USDJPY, consider longs from just above 81.33 for a rally past the 55D EMA at 81.83.
We have reentered the range play from the previous week with daily stochastic heading higher though macd is flat under the signal line. From the 4H picture we have a new confluence of buys coming out while hourly charts see a flat macd and stochastic coming off overbought levels. Note since yesterdays initial past 0.7867 we have seen NZDUSD in a tight range play. Consider buys from just above 0.7867 looking for an eventual break of the resistances.
Yesterday end-up a high wave spinning top with daily stochastic rising while macd is easing off. Note we have the 21D EMA at 1.0672 as our immediate strong resistance. Intraday we are seeing a conflunece of buys from the 4H and hourly picture with stochastic in the latter seeing new bullish crosses in overbought levels. Look for a close above the 1.0672 area to spark the next up-leg. Alternative entry will be a bounce from 1.0624.
Wednesday’s close was a long-legged spinning top suggesting a run for the resistances while macd is bottoming out and stochastic headed for overbought levels. Intraday we have 4H charts with a new bullish cross in stochastic while macd is rising. Hourly indicators see stochastic going overbought while macd has a new bullish cross. Immediate risk is for an upside break for a rally to 1.4324 then on to string resistances at 1.4358(67). Alternative entry is a bounce from 1.4244.
At the close we found ourselves just around the break out point 1.6156 from the daily charts. Indicators were mixed macd pointing lower and stochastic rising. We still have a pattern of lower lows and lower highs while under the EMA lines. Intraday we have a mixed set of signals with 4H macd and stochastic heading opposite directions while hourly indicators are rising. For now we view 1.6156 to 1.6176 as a no trade zone, push above 1.6176 and we will look for a rally to 1.6238, push under 1.6156 and we will expect a sell-off to 1.6118.
©2011 FX Instructor Forex Blog - For Traders, By Traders. All Rights Reserved.