Asian Session Notes 12/05/13

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By mdelapaz | December 5, 2013 2:49 PM EST

Fx Instructor

AUDUSD

Resistance: 0.9055 moderate / 0.9089 minor / 0.9112 moderate

Support: 0.9000 psychological / 0.8971 moderate / 0.8942 minor

Aussy saw a break of the congestion floor for the past five days following a weaker than expected read in GDP yesterday and speculations of a taper in the US resurfacing. Daily indicators has a new bear cross in stochastic looking poised to head back down below the oversold threshold while macd is dropping. In the lower time frames we are seeing mixed signals with 4H stochastic coming off oversold levels while macd is heading lower and hourly charts having stochastic come off overbought areas as macds head up. From the calendar we are waiting for the release of the latest trade balance figures a read well below the -380 million consensus forecast would be a fresh excuse to look for weakness. A close below 0.9000 could be seens as a trigger for a follow through to our bearish breakout. Alternative entry will be coming off 0.9055.

GBPUSD

Resistance: 1.6398 minor / 1.6414 moderate / 1.6438 moderate

Support: 1.6370 moderate / 1.6338 moderate / 1.6293 minor

Following a late surge Cable saw along tail for Wednesday closing well within the range from earlier in the weak where we saw long wicks in turn. We have a hanging man, for a daily candle. Among indicators we have stochastic coming off overbought levels while macd is just beginning to top top-off. Intraday we have a failed double top from the 4H picture as an earlier break failed to see sustained losses on the late rip with 4H indicators now showing a bullish stochastic though macd remains bearish. Hourly charts are also mixed with stochastic now pushing oversold while macd is also bullish. For now it appears we have lost bullish momentum though bear have yet to really come in droves. We risk getting mean reversion plays started considering the gap between prices and EMA lines with a break of 1.6370 a possible bearish entry. Note we will be  hearing from the BoE later.

GBPJPY

Resistance: 167.77 minor / 168.38 moderate / 168.70 minor

Support: 167.35 minor / 166.90 moderate / 166.46 moderate

GBPJPY has seen two days of high wave spinning tops with lower highs and lower lows this as equity markets have retreated from highs with growing talk of a US taper once more. From indicators we have stochastic finally coming off overbought levels while macd is topping out. In 4H charts we have macd’s easing off while stochastic is hovering just above the oversold areas thus far failing to push under 20. Hourly charts for their part are mixed with stochastic coming off overbought levels and macd’s heading up. Despite the mixed intraday charts the gap between prices and daily EMA’s along with the loss of bullish momentum suggests we ought to look for a sharper pull back. Persistent weakness in equity markets can be seen as a convenient intermarket correlation excuse for shorting. Immediate objective will be to get to S1 in pivots at 166.90 possibly a break to start mean reversion should equity markets drop.

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