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Asian Session Notes 5/08/13
GBPUSD
Resistance: 1.5488 minor / 1.5516(18) moderate / 1.5548 moderate
Support: 1.5422(31) moderate / 1.5370(82) moderate / 1.5334 minor
Finally we have Cable managing to break lower of the range play for the past week seeing a follow through to our rejection from the 50 Fib retracement level of the sell-off for the year. From indicators we have a bearish divergence out of stochastic while macd has just crossed lower in-line with the drop. Note we have the 21D EMA as our immediate support and objective at 1.5422(31). In the lower time frames we have a bearish bias as 4H stochastic begins to oscillate around 20 indicating a bear trend while the macd is bearish. Hourly charts for their part are also seeing a new confluence of bears as stochastic crosses lower while macd is under the signal line. We are set to close the daily candle under the 1.5488 congestion floor potentially signalling further losses to come. Consider shorts from below the said price, better under 1.5516, or on a push below 1.5422(31). Our objective now is to see Cable down to the channel support line.
EURGBP
Resistance: 0.8460 moderate / 0.8474 minor / 0.8489 moderate
Support: 0.8441 minor / 0.8428 minor / 0.8411 strong
EURGBP appears vulnerable for a drop in the big picture with a descending triangle in the weekly charts coming off the resistance line of a bear channel, our immediate support at 38.2 Fib, of the rally from july at 0.8411 has proven to be a tough nut to crack. With Yesterday’s bounce we have now formed a double bottom in the daily charts with macd bottoming out and stochastic coming off oversold levels. In the lower time frames we have a ‘dark cloud cover’ in 4H charts while stochastic has crossed lower unable to push overbought though macd is bullish. Hourly charts for their part are mixed with stochastic coming off 20 while macd has also crossed lower. Given the lack of enthusiasm form the lower time frames we are now looking at EURGBP as a range play despite the double bottom we see 0.8460 as a possible short with stops just above 0.8466 and buys off 0.8411 with stops at 0.8390.
GBPJPY
Resistance: 153.00 minor / 153.41 minor / 153.69 minor
Support: 152.32 moderate / 151.67 moderate / 151.20 moderate
Following our daily doji candle monday we have GBPJPY selling off easing back under the previous 153.52 daily breakout point. The move appears to be inline with a broadly weaker Cable. Among indicators we have stochastic coming off overbought levels while macd is dropping and bullish EMA lines fast approaching. We may have a false break from Friday. In the lower time frames we have sell signals in both 4H and hourly charts. In the former stochastic has pushed oversold in line with macd. Hourly charts for their part has stochastic looking to push under the 20 mark while macd is already under the zero line heading lower with its signal. Immediate risk call for prices testing the 21D EMA at 151.67 though we may eventually view the said price as a possible bounce off point. Note numbers just released support the idea of a weaker Cable with the Retail Sales Monitor of the BRC showing a 2.2% contraction.
AUDUSD
Resistance: 1.0188 minor / 1.0221 moderate / 1.0242 moderate
Support: 1.0152 strong / 1.0115 minor /
Tuesday saw the RBA surprising markets with a rate cut pushing down to the key support level of 1.0152 the daily congestion floor since July of last year. Among indicators we have a confluence of bears with stochastic poised to push oversold while macd is dropping and price action suggests a rejection from the daily EMA lines. Intraday candlesticks has formed a morning star in the 4H charts opening the possibility of a significant pullback though stochastic is oscillating around 20 while the macd is bearish. Hourly charts for their part are mixed with stochastic pushing for oversold levels and macd heading up. Given the overall bias and a ‘morning star’ in 4H charts we prefer looking for a sell-on rallies to the moderate resistance at 1.0221. A break of the support at 1.0152 will also be seen as a bearish entry point.
AUDJPY
Resistance: 100.87 minor / 101.19 minor / 101.56 moderate
Support: 100.39 minor/ 99.84 moderate / 99.28 moderate
With the surprise rate cut by the RBA we have AUDJPY selling off Tuesday to close just around its lounds inside the daily EMA lines once more. Note we have lower highs in our price charts since April’s 105.42 evening star. Daily indicators has macd heading lower while stochastic has come-off overbought levels. From the 4H picture we have a bearish boas with stochastic oscillating around 20 to suggest a bear trend while macd has been dropping under zero. In the houry picture we have macd above the signal line as the indicators has bottomed out while stochastic is at risk of crossing up. Note we do have a strong performance in US equities to counter balance the RBA’s actions as such any sell-off will likely find a support from 99.28. For now we suggest waiting for Chinese trade data as our next catalyst.
EURUSD
Resistance: 1.3097 moderate / 1.3113 minor / 1.3137 moderate
Support: 1.3072 minor / 1.3053 moderate / 1.3032 minor
Euro saw a long wick for Tuesday as an earlier rally driven by strong German Factory numbers was unable to hold on to gains eventually easing back down in midday European trade. Once more we have prices just above the daily EMA lines with charts inside a broadening pattern that has developed through April. Indicators show stochastic poised to push into oversold levels while macd has a bear cross. In the lower time frames we have a confluence of bears from the 4H picture as stochastic pushes into oversold levels while macd is dropping. Hourly charts for their part are mixed with stochastic seeing a bullish divergence while macd is below the signal though bottoming out. At the moment we prefer remaining sidelined though bias is for the sell side. A close under 1.3053 will be bearish while a rejection from 1.3097 could also be seen as a possibility.
Source: http://www.fxinstructor.com/blog/asian-session-notes-50813
