Asian Session Notes 10/26/12

NZDUSD

Resistance: 0.8204 minor / 0.8231 moderate / 0.8267 moderate

Support: 0.8173 minor / 0.8146 minor / 0.8118 minor

Thursdays saw a high wave spinning top as the huge reversal in the previous faltered as it reentered the range play in the preceding three weeks. Indicators has a flat daily macd while stochastic is pointing higher. At this we are ignoring the daily EMA lines given their repeated violation. In the lower time frames we have mixed signals from 4H charts with stochastic heading lower and macd flat above the signal line. Note we saw a huge tail in the previous candle following a better than expected trade figure from New Zealand. Hourly charts for their part has mixed signals. For now we prefer playing the range game looking for shorts off 0.8231 with tight stops above yesterday’s highs at 0.8242.

EURUSD

Resistance: 1.2978 minor / 1.3014 moderate / 1.3041 minor

Support: 1.2934 moderate / 1.2892 moderate / 1.2861 moderate

Following the sell-off in New York trade we saw EURUSD closing around the 34D EMA though the failure to stay under the said price reduces the sense of urgency for jumping short. We have daily stochastic easing off to oversold levels while macd are also heading lower. Note from previous actions the 34D EMA appears to be the most effective over the last two months. In the 4H picture we have a bear market with stochastic oversold and macd’s heading lower though the candlesticks suggest a loss of momentum. Hourly charts for their part has a bullish stochastic while macd is bottoming. Immediate risk calls for a rally to the 1.2978 region perhaps 1.3014 resistance though we are also looking to short from the latter. Note a close below the 34D EMA at 1.2934 will open the way for a sell-off to 1.2861.

AUDUSD

Resistance: 1.0376 minor / 1.0396 minor / 1.0411 moderate

Support: 1.0338 moderate / 1.0297 minor / 1.0269 minor

Aussy managed to see a long wick at the daily close for a qualified ‘shooting star’ though there is little sense of urgency given the absence of a significant uptrend ahead of the candle. Daily indicators has stochastic pointing up and macd’s also bullish while prices are just above flat EMA lines. In intraday charts we have mixed signals from the 4H picture with stochastic looking to cross higher while the macd is flat above the signal line. Hourly indicators for their part has a mixed view with stochastic just crossing up while macd remains bearish, interestingly we have little conviction in hourly candlesticks though we see long tails as well. With mixed signals and the qualified ‘shooting star’ we prefer looking for a sell on rallies from atleast under 1.0376 better just under yesterdays highs with tight stops above 1.0411.

GBPUSD

Resistance: 1.6144 minor / 1.6178 minor / 1.6216 minor

Support: 1.6110 minor / 1.6052 moderate / 1.6007 minor

In the end Cable managed to hold to much of its gains Thursday with an open bozu among the daily candlesticks. Daily indicators now have a bullish cross in macd’s while stochastic is pushing for overbought levels. Note the failure to push to the 1.6178 level suggests the daily lower high and lower lows remain valid. In the lower time frames we have mixed signals with stochastic coming off overbought levels while macd is heading up and candlesticks has been indecisive. Hourly charts for their part has a confluence of bears with stochastic poised to push oversold and macd’s heading lower. Given the tight range in New York trade we prefer looking taking a straddle with shorts on a close below 1.6110 suggesting the daily lower high and lower lows pattern remain valid. While buys may also be taken above 1.6144 for a run to 1.6172 then 1.6216 ultimately testing the swing highs at 1.6309.