Asian Session Notes 2/13/13

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By mdelapaz | February 13, 2013 12:49 PM EST

Fx Instructor

AUDUSD

Resistance: 1.0344 strong / 1.0368 minor / 1.0386(89) moderate

Support: 1.0321 minor / 1.0296 moderate / 1.0275 moderate

With the huge rally in Aussy Tuesday we have a bullish engulfing in the daily candlesticks that has taken prices to its weekly double top breakout point. Thus far we have seen very quiet trading in Asia, exacerbated by the upcoming US State of the Union address. From indicators we have daily stochastic heading and macd’s bottoming out while our key resistance at above 1.0344 is a combination of the 200D SMA and 21D EMA at 1.0386(89). Intraday charts has a doji thus far in the 4H candles with stochastic overbought and macd rising. Hourly charts are similarly bullish among indicators though price action suggests a loss of momentum. Note the longer it takes to push past a strong resistance with oscillators overbought the greater the possibility of a bear market. For now we prefer remaining sidelined with the US State of the Union address though if prices remain unchanged afterwards we will suggest shorts off 1.0344 with tight stops above 1.0361.

GBPUSD

Resistance: 1.5675(80) moderate / 1.5704 minor / 1.5740 minor

Support: 1.5645 minor / 1.5631 moderate / 1.5572 moderate

The turn-around in New York trade saw Cable closing with a hammer, a long tail sticking out under the 1.5645 region. Among indicators we continue to see mixed signals in the daily picture with stochastic heading lower and macd’s flat above the signal line. Note over the last two weeks whipsaw action in GBPUSD has seen prices pulling back to the 21D EMA lines repeatedly while still generating lower lows. In the lower time frames we have 4H macd poised to cross higher while stochastic is overbought. Hourly charts for their part has a bearish divergence in stochastic while macd is heading up. For now we are waiting for a push past 1.5675(80) before taking the buy side for a rally to the 21D EMA at 1.5772. The 21D EMA may also be a sell area though not in the same day.

EURUSD

Resistance: 1.3468 minor / 1.3496(00) minor / 1.3541 moderate

Support: 1.3427 minor / 1.3403 strong / 1.3351 minor

Tuesday saw a big bounce for the EURUSD coming off its 34D EMA, following through monday’s rally and closing above the 21D EMA. Daily indicators has stochastic off oversold levels while macd is bottoming out. Interestingly our bounce is coming off different Fib levels 78.6 for the rally from January 22, or 50 Fib level off January 04. From the 4H picture stochastic is stuck under the 80 barrier with a bear cross in the making while macd is rising. Hourly indicators has a flat macd and a bearish divergence. Price action is indecisive for both hourly and 4H candles. Given the big picture we prefer a buy on dips to the 1.3403 area for a resumption of the previous uptrend. Alternative entry will be on a close above 1.3468.

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