Asian Session Notes (02/18/2013): Yen pairs have license to rally

NZDJPY

Resistance: 79.81 minor / 80.00 moderate / 80.27 minor

Support: 79.36 moderate / 78.89 moderate / 78.45 moderate

Kiwi Yen saw a mixed close in the daily charts Friday though the spinning tops were enough to keep us above the weekly breakout point, 77.27 61.8 Fib retracement of the sell-off from July of 2007. With New Zealands data of late surprising on the upside while the Japanese are getting little flack on the yen we expect NZDJPY to see sustained gains of the next few weeks. At this point we have daily stochastic pushing back up to overbought levels while macd is flat below the signal line. Intraday we have a confluence of buys from macd and stochastic, the latter pushing overbought. Hourly charts for their part is poised to push overbought. We prefer a buy on dips approach to 79.36 though a daily close above 80.00 should also be seen as a bullish entry.

USDJPY

Resistance: 94.46 moderate / 94.80 minor / 95.00(04) strong

Support: 93.86 minor / 93.31 minor / 92.96 moderate

A reuters leaked draft of the G20 statement managed to reverse earlier weakness in the Yen pairs Friday to eventually see USDJPY with a long tail and decent body for the daily candle. In the ened despite the pullback for much of the past week we still have a higher low in USDJPY with the object now, making a run for the 95.00(04) psychological resistance, and June 2010 highs. Among indicators we have finally broker the bearish divergence in daily charts with stochastic now poised to push overbought while macd is bearish. We also have a bounce off the 21D EMA. Note G20 statement over the weekend is actually supportive of Japanese efforts to reflate the economy, merely calling for Japanese officials to stop jawboning the Yen down. Intraday we have a confluence of buys with hourly stochastic poised to push overbought while in the 4H level we have it reentering overbought areas even as macd is bullish in both times. Look for a close above 93.86 as an excuse for going long.

AUDUSD

Resistance: 1.0296 moderate / 1.0321 minor / 1.0344 strong

Support: 1.0273 moderate / 1.0241 minor / 1.0202 minor

At the close we have Aussy with a high wave candle in the weekly charts suggesting bearish momentum has been lost though we also managed to pullback under the weekly double top breakout point, 1.0344, keeping the pattern valid. Among indicators we have macd under the signal line though lacking slope while daily stochastic has just come off overbought areas. Thus far we have tried to ease off with earlier releases showing a poor motor vehicle sales figure at -2.4%. From the lower time frames we have a mixed view as 4H stochastic and macd are bearish, the fore former oversold. This as hourly charts see a bullish divergence in stochastic while macd is heading down. Look for shorts coming off 1.0297, preferably 1.0344 a strong resistance. Alternatively a close under 1.0273 is also a bearish entry.

EURUSD

Resistance: 1.3353 moderate / 1.3375 minor / 1.3403 strong

Support: 1.3306 moderate / 1.3265 strong / 1.3224 minor

Friday tunred out to be a high wave spinning top, suggesting a loss of bearish momentum as prices hit the 55D EMA, a moderate support. Indicators wise we still have a confluence of bears from the daily picture with stochastic poised to push oversold while macd is dropping, we now have a lower high and lower low in the daily price charts. Intraday we have a confluence of bears in the making for 4H charts with stochastic crossing lower and macd’s under the signal line. Hourly charts has stochastic pushing oversold and macd crossing lower. Note we have ECB Pres. Mario Draghi testifying before the EU Parliament(1430GMT), look for a possibly dovish tone given recent comments and an excuse to eventually break lower. Consider shorts from just under 1.3353 near the European open or on a close below 1.3306. Ideally we want to come off 1.3403.