Asian Session Notes 2/01/13

EURJPY

Resistance: 126.65 moderate / 127.38 moderate / 127.71(80) strong

Support: 125.98 minor / 125.60 moderate / 125.01 minor

EURJPY failed to see a follow through rally Wednesday as it hit the congestion floor from 2009 at 127.71(80), a strong resistance, to close with a black real body. Daily indicators has stochastic with a bearish divergence for the past two weeks while macd is now topping off with the price charts themselves forming a possible double top. In the lower time frames our double top is more evident with the 4H picture as wait to ease to the breakout point at 123.88 while stochastic is poised to drop under 20 and macd is opening lower. Hourly charts also has a confluence of bears for stochastic and macd. Immediate risk calls for further weakness with a close under 125.98 likely to trigger a move to the 123.88 double top break out point. Alternative entry will be a rejection from 126.65, the daily pivot point. Note pattern target calls for 120.17.

EURUSD

Resistance: 1.3544 minor / 1.3596 moderate / 1.3619 minor

Support: 1.3500 strong / 1.3455(61) moderate / 1.3407(34) moderate

With European equities continuing to sell-off yesterday we had the Euro pulling back to the daily EMA lines with indicators now showing a new bear cross in macd’s while stochastic may be at risk of crossing higher. We consider the weeks movement as mean reversion given how far-off Euro was from the EMA lines Friday. In the lower time frames we have a confluence of bear in the 4H charts with stochastic crossing back down after a brief push up through its signal while macd is bearish. Hourly stochastic also has a new bear cross with the macd flat under the signal. Considering the ECB decision and EU Economic summit we prefer remaining sidelined though the daily EMA line at 1.3455(61) would make for a possible bounce of point later.

NZDUSD

Resistance: 0.8366 minor / 0.8394 moderate / 0.8412 minor

Support: 0.8343 strong / 0.8317 minor / 0.8298 minor

Kiwi has already seen a sharp sell-off following the release of jobs data in post New York trade, the Wellington session. We New Zealand’s jobs market contracting for three quarters in a row with Employment in Q4 at -1.0% against a 0.4% consensus to see the Unemployment Rate at 6.9% down from 7.3% as people stopped looking for work. Daily indicators has a confluence of bears with stochastic heading for oversold levels while macd has just crossed lower. In intraday charts we have sell-signals from both hourly and 4H macd and stochastic. Note part of our sell-off from release is priced with the Wednesday candle, for now we prefer remaining sidelined looking for a daily close below 0.8343 a congestion floor and 55D EMA. Given the numbers from New Zealand lately we are looking for a follow through to the rejection from 0.8476 key resistance level.

AUDUSD

Resistance: 1.0344 strong / 1.0370 minor / 1.0411 moderate

Support: 1.0296 minor / 1.0275 moderate / 1.0235 minor

Wednesday saw AUDUSD with its biggest sell-off for the past two weeks pushing twice the average daily range following a break of the daily/weekly double top pattern trigger at 1.0344. Among indicators we have daily stochastic just pushing oversold while macd’s are heading lower, we have more dead cross among the daily EMA’s. Note earlier releases saw better than expected Jobs data for January with the Unemployment Rate remaining steady at 5.4% and the Employment change numbers at 10.4K though knee-jerk reaction was short-lived. In intraday charts we have a bearish macd from the 4H picture while stochastic appear to oscillating around 20 and the candlestick indecisive looking for a breakout. Hourly charts for their part are mixed with stochastic poised to got oversold and macd topping off. For now look for a close below 1.026 to confirm our bearish breakout yesterday with a follow through sell-off. Pattern target calls for 1.0088 with projected lows at 1.0262.