Asian Session Notes (2/22/13): Waiting for the Aso/Amira press conference

GBPUSD

Resistance: 1.5261 strong / 1.5321 minor / 1.5400 moderate

Support: 1.5220 moderate / 1.5168 moderate / 1.5132 minor

Cable has seen a huge sell-off over the past two weeks since getting rejected from the 21D EMA. For Thursday daily candles gave us a hammer closing just around the supposed strong support at 1.5261, lows for the range play in the last two year. Prices for their part has a big gap with the daily EMA lines suggesting mean reversion risk. Among indicators we have daily stochastic coming off oversold areas while macd is still pointing down. From the lower time frames we have stochastic overbought in the 4H picture while macd has just crossed up. Hourly charts are mixed with stochastic crossing lower and macd above the signal. Given the daily hammer and the close for the week we prefer looking for a technical correction, consider buys on an intraday close above 1.5261.

EURJPY

Resistance: 123.44 strong / 124.15 moderate / 124.65 minor

Support: 122.48 moderate / 121.57 minor / 120.77 strong

Thursday saw EURJPY closing below the 21D EMA and triggering a descending triangle breakout among the daily charts. Pattern target calls for 118.85, a moderate support. Intraday we have 4H indicators mixed as stochastic comes off oversold levels while macd is dropping. Hourly indicators are also mixed with stochastic crossing lower and macd’s heading up. Given the mixed signals and a press conference by the Economic and Finance Ministers we prefer remaining sidelined. Still with a strong resistance at 123.44 our pattern breakout point shorts may be consider under the said price on bearish candlestick patterns.

USDJPY

Resistance: 93.25 moderate / 93.52 minor / 93.87 minor

Support: 92.78 minor / 92.22 moderate / 91.79 minor

With USDJPY breaking lower yesterday we have a clear should-head-shoulder pattern in the daily charts while indicators also have a bearish bias with daily stochastic heading down and macd dropping. From the big picture we have prices just under the 38.2 Fib retracement level of the sell-off from June 2007, 94.11. In the lower time frames we have mixed signals with 4H macd heading lower and stochastic coming off oversold areas while hourly charts are the opposite with stochastic bearish and macd just crossing up. At this point we prefer remaining sidelined ahead of the Japanese Cabinet meeting where the Finance Minister and Economic Minister, Taro Aso and Akira Amari, will be holding a press conference afterwards. Still a close under 92.22 the SHS neckline could trigger a bigger pullback.