Asian Session Notes: 01/08/14

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By mdelapaz | January 8, 2014 1:21 PM EST

Fx Instructor

EURUSD

Resistance: 1.3622 moderate / 1.3656 moderate / 1.3677 minor

Support: 1.3596 minor / 1.3571 minor / 1.3527 moderate

Euro managed to close below the daily EMA lines and remain under the double to break out point from our charts after a whip sawish trading day that saw prices push for 34D EMA highs first. Daily indicators has stochastic around the over sold threshold at risk of oscillating around the number while macd is down looking to head under the zero line. We continue to look for a follow through to last weeks bearish engulfing rejection off the 61.8 Fib retracement level of our 2011 sell-off. Intraday we have a mixed view as 4H stochastic drops and macd’s head up for the zeroline. Hourly charts for their part has stochastic heading up while macd remains bearish. Given the big picture we prefer looking for shorts the immediate objective take out the weeks lows at 1.3571 for a drop for the 1.3527 region.

AUSDUSD

Resistance: 0.8935 moderate / 0.8972 moderate / 0.9004 moderate

Support: 0.8910 moderate / 0.8889 moderate / 0.8868 minor

Tuesday saw Aussy finally getting a rejection from the daily EMA lines to close back inside the consolidation for much of December. Among indicators we have stochastic crossing lower for the daily picture while macd is heading up with an earlier release, the Construction Index faltering to 50.8 from 55.2 to underscore the slowdown in growth and the RBA’s concerns. Recall we still have the RBA with an unofficial target for the Aussie at 0.8500, a level they will be happy with though not taking measures for. In intraday charts we have mixed signals with 4h stochastic heading up and macd’s down while hourly indicators could see us develop a confluence of bears with stochastic dropping andmacd at risk of a its own bear cross. With the daily close we prefer looking for shorts though false breakouts in intraday charts suggest we need an hourly close under 0.8910 to be confident of sustained weakness.

USDJPY

Resistance: 104.82 moderate / 105.14 minor / 105.43 moderate

Support: 104.49 minor / 104.17 moderate / 103.91 minor

USDJPY saw a piercing pattern with yesterdays close seeing us bouncee off the 21D EMA. From indicators we are seeing a mixed view with daily stochastic trying to cross up while macd is bearish. Note we face a dilemma from USDJPY big picture as the monthly charts show us testing a key resistance, 61.8 Fib of the sell-off from 2007. Policy wise we continue to have the BOJ with its goal of doubling the money base a catalyst for eventually pushing past 105.57. In the 4H picture we have macd’s with a bullish crossover and stochastic bullish though at risk of crossing lower should price action falter. Hourly charts are generally bullish with stochastic likely to oscillate around 80 while macd is heading up. For now we appear to have lost momentum from the price action but a close above R1 n pivots at 104.82 could be sen as a bullish entry though we caution against looking for a surge past the key 105.57 area, 61.8 Fib retracement level of the 2007 sell-off.

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