Asian Session Notes: 11/02/12

AUDJPY

Resistance: 83.55 strong / 83.78 moderate / 84.04 minor

Support: 83.39 minor / 83.17 minor / 82.97 moderate

Thursday saw a strong close in AUDJPY with prices just around its high in the end, also a key resistance level 83.55. Daily indicators continue to see a confluence of buys with stochastic overbought while macd is also heading up. In the lower time frames we also see a confluence of buys from the 4H picture with stochastic overbought and macd rising. Hourly indicators for their part has macd topping off while stochastic has come-off overbought levels. Note we have a bearish engulfing in the previous hourly candle. For now immediate risk calls for a technical correction on a close under 83.39 though a close above 83.55 may pave the way for a new upleg.

GBPUSD

Resistance: 1.6120 minor / 1.6139 minor / 1.6175 moderate

Support: 1.6086 minor / 1.6064 minor / 1.6038 minor

After seeing a follow through rally to our ‘Three Inside Up’ pattern we have Cable closing with a ‘Gravestone Doji’ in Thursday trade though indicators continue to see a stochasting poised to push overbought and macd rising. Note we saw yesterday’s highs just around the 1.6178 lower high from October 17. From the 4H picture we have stochastic pushing for oversold levels while the macd is topping off. Hourly charts for their part has stochastic heading for the 20 threshold while macd is already pointing down. Immediate risk calls for a bear market with a break of 1.6086 as our entry the key price target 55D EMA, currently at 1.6037.

EURUSD

Resistance: 1.2956 moderate / 1.2983 minor / 1.3013 moderate

Support: 1.2923 minor / 1.2884 moderate / 1.2825 minor

After the whipsaw trade EURUSD closed below the 21D EMA for a follow through bear market to the previous ‘Gravestone Doji’. Daily indicators has stochastic crossing lower while macd is heading down. Prices themselves has pushed under the 34D EMA as we head for our symmetric triangles rising support line. In intraday charts we are seeing a bearish bias with 4H stochastic heading back into oversold levels while the macd indicators is flat. Hourly charts has macd’s heading lower while stochastic is poised to push into oversold levels. Immediate calls for further losses though absent a big catalyst we prefer a sell on rallies for now, coming off 1.2956. A close under 1.2923 may be seen as a bearish entry only when we are near to European open or should we have a broad sell-off in Asian equities.

AUDUSD

Resistance: 1.0410 moderate / 1.0431 minor / 1.0477 moderate

Support: 1.0390 minor / 1.0355 minor / 1.0343 minor

We have close above the 1.0410 level in our daily chairs for Aussy opening the way for further gains, perhaps a run to the swing highs at 1.0624 in the coming weeks. Indicators has the daily stochastic pushing overbought while macd is also heading up. Our daily close has also effectively invalidated the concerns generated by Wednesdays long wick. From the 4H picture we have stochastic overbought though at risk of coming off the 80 area while macd is heading up. Hourly charts for their part has a bearish divergence in stochastic with macd topping off following the knee-jerk reaction to the weaker than expected PPI data. For now immediate risk calls for a further correction though we would like to look for a buy on dips to just above the 1.0355 level possibly 1.0390 by European trade. Going forward we are now looking for a confirmation of the 1.0410 daily breakout.