Asian Session Notes Feb 8, 2013

EURJPY

Resistance: 125.25 minor / 125.57 minor / 125.93 minor

Support: 124.85 minor / 124.48 minor / 124.03 moderate

It appears that our strong resistance at 127.83 will be holding for now on a dovish ECB and a risk averse tone. We now have a double top that’s nearing its trigger, 124.03, in the daily charts. Daily indicators has macd’s crossing lower and stochastic heading down. From the 4H picture we have mixed signals with stochastic at risk of crossing up while macd is heading lower. Hourly charts for their part has a confluence of bears as macd’s stay flat below the signal line and stochastic starts dropping. For now we are looking to trigger the double top pattern with possible shorts on our way to the breakout point. Look for sells from just under 125.57 or on a push below 124.85 the 200H SMA.

EURNZD

Resistance: 1.6096 minor / 1.6170 moderate / 1.6255 minor

Support: 1.6043 moderate / 1.5982 moderate / 15921 minor

As with all the euro pairs we have a sharp sell-off in EURNZD on a surprisingly dovish tone from the ECB’s Mario Dragi in his press conference after the ECB Rate decision. At the moment we have prices at the 50 Fib retracement level of the 3-week rally. Among indicators we have stochastic heading up and the 21D EMA just under the 1.6043 price point, while the macd is still pointing down. In intraday charts we have a bearish bias in 4H indicators as stochastic is poised to push oversold and macd in the process of crossing lower. Hourly indicators are mixed with a bullish stochastic just off oversold areas while macd is dropping. From the floor of 1.6043 we may be able to form a double bottom. For now look for a close above 1.6096 on a hourly basis to form our double bottom the objective a run for 1.6221 the projected high.

EURUSD

Resistance: 1.3405 moderate / 1.3439 minor / 1.3458 minor

Support: 1.3351 minor / 1.3297 moderate / 1.3265 strong

Following yesterdays big sell-off we have Euro around the 34D EMA with indicators from multiple time frames all looking bearish. We have the daily and 4H stochastic oversold while the hour hourly has just crossed lower even as macd in all three are also bearish. Intraday we have an inverted frag from the hourly price action as markets consolidate following the ECB inspired drop. Recall during the press conference ECB Pres. Mario Draghi implied a possible rate cut in the near-term with inflation relatively weak while describing Euro strength as a possible hindrance to the recovery. For the moment we are just under a moderate resistance at 1.3405 look for shorts from under this area by the time European market open. Alternatively we can use the 21D EMA at 1.3439 as a possible sell-area.