Asian Session Notes 11/13/12: Looking for a further sell-off

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By mdelapaz | November 13, 2012 1:21 PM EST

Fx Instructor

GBPJPY

Resistance: 126.42 minor / 126.72 minor / 127.06 moderate

Support: 125.97 moderate / 125.54 moderate / 125.30 minor

We have a high wave candle for GBPJPY yesterday, suggesting a loss of momentum, with the lows around our 200D SMA for a moderate support area now at 125.97. Daily indicators has stochastic in oversold levels while macd is dropping. In the 4H picture we have macd crossing higher while stochastic has also just come-off the oversold areas. Hourly charts for their part has a bearish stochastic while macd is heading up. For now immediate risk calls for a close below 125.97 to trigger further weakness otherwise a failure to see such a close may lead to base building and a bounce off the said price later on. Note we are still looking for a follow through to our double top breakout from Thursday the previous week.

AUDJPY

Resistance: 82.97 moderate / 83.18 minor / 83.48 moderate

Support: 82.67 minor / 82.33 moderate / 81.98 minor

Despite a very bullish close for Monday we have AUDJPY easing off at the moment following poor numbers in Australian Business Confidence and the broadly weaker equity market. At the close we saw AUDJPY just above the moderate resistance of 82.97. For now we have price action dragging the pair lower while daily indicators are mixed with stochastic crossing up and macd’s heading lower. In intraday charts we appear to be forming a ‘bearish engulfing pattern’ from the 4H picture with stochastic flat just under the overbought threshold while macd is pointing up. Hourly charts for their part has a confluence of bears with stochastic coming off overbought areas while macd is poised to cross lower. Note we may be forming the right shoulder of a daily level SHS pattern. Consider shorts from just under 82.97 with tight stops above the days high for 82.33 our moderate support level.

EURJPY

Resistance: 101.28 moderate / 101.74 minor / 102.17 moderate

Support: 100.87 minor / 100.43 moderate / 100.14 minor

Monday saw a very tight range in EURJPY given the lack of key data and absence of the US banks. At this point we have had two candles in a row which suggests indecision in daily charts. Note we have yet to see the objective of our daily double top breakout from last wednesday. Among indicators we have daily stochastic coming off oversold levels while macd’s are heading lower. From the 4H picture we have mixed signals as stochastic and macd’s both heads up while price charts have been ranging. This as hourly charts for their part has stochastic coming off overbought areas and macds pointing up. Given the tight range and mixed signals we can consider a straddle trade an hourly close above 101.28 may be considered a buy while a close under 100.87 will be a bearish entry.

AUDUSD

Resistance: 1.0443 moderate / 1.0480 minor / 1.0519 moderate

Support: 1.0417 minor / 1.0382 minor / 1.0359 moderate

Monday saw a bullish candle though failing to push past the moderate resistance at 1.0443 in Aussy. Daily indicators has a confluence of buys following the close as stochastic finally crossed up inline with the macd indicator, at the moment however we are testing the immediate support a trigger for an hourly double top. Note we have prices just around the 1.0417 threshold a close below this in an hourly basis could trigger a drop with the pattern target at 1.0396. In 4H charts we have a mixed view as stochastic comes off overbought levels while macd is flat just above the signal line. Immediate risk in Aussy is for further weakness possibly down to the 21D EMA though overall trend is still bullish. Note there is a growing risk of a double top in the daily scale. Consider shorts on a close with tight stops at 1.0430.

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