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Asian Session Notes 5/14/13
NZDUSD
Resistance: 0.8261 strong / 0.8295 minor / 0.8317 minor
Support: 0.8236 minor / 0.8194 moderate / 0.8162 moderate
Kiwi has a follow through sell-off to the previous week’s succession of bearish daily candles with the big picture charts looking set for a pullback to the 0.8066 possibly 0.7922 50Fib and 61.8Fib retracement levels of NZDUSD’s rally from last year. Among indicators we have daily stochastic in oversold levels while macd is also dropping and the EMA lines in the process of generating dead crosses. We seem to be looking for follow through weakness to Fridays big double top breakout. Intraday we have 4H charts heading lower as stochastic reentered oversold areas while macd is technically bearish under the signal line. Hourly charts for their part suggests a pullback with stochastic heading up and macd bottoming out. Consider shorts coming off the 0.8261 price point. Alternatively a break of 0.8224 may also be seen as a bearish entry. Note we have a potential discontinuity with Retail Sales data at 2245GMT. Better than expected results may trigger a sharp pullback to well above the 0.8261 area.
AUDNZD
Resistance: 1.2084 moderate / 1.2124 moderate / 1.2168 moderate
Support: 1.2048 moderate / 1.2019 minor / 1.1989 moderate
AUDNZD has been indecisive seeing a huge whipsaw in the prior week with monday turning out to be a spinning top inside the congest formed by last weeks gyrations. Despite the daily acrobatics we have a confluence of buys as macd see a bullish cross while stochastic also has a bullish divergence suggesting we look for a break higher. In the lower time frames we have mixed directions as hourly charts see stochastic poised to push oversold and macd with a new bear cross. This as 4H indicators has a bullish confluence with stochastic looking to push overbought. Given the bad read in the latest Australian Retail Sales numbers ideal scenario for us would be for the Retail Sales data from New Zealand to surprise on the upside giving us a break of the support and a retest of 1.1989.
GBPUSD
Resistance: 1.5330 minor / 1.5376 moderate / 1.5415 minor
Support: 1.5276 minor / 1.5245 moderate / 1.5213 moderate
Cable saw a follow through sell-off to its bullish channel breakout, with prices pushing further below the support line to close with a big black candlestick. We now have daily stochastic in oversold levels while macd is heading lower with EMA daily lines beginning to turn. From the lower time frames we have a confluence of bears in 4H charts with stochastic reentering oversold areas and macds under the signal line. Hourly charts for their part has an inverted flag pattern from the candlesticks. With stochastic overbought in the hourly level and macd under the signal line we will view the inverted flag as a bear market setup with any move to come-off overbought levels in hourly stochastic likely to coincide with the pattern getting triggered. Alternative entry will be a rejection from 1.5330, ideally coming off 1.5376.
EURUSD
Resistance: 1.2992 moderate / 1.3021 minor / 1.3051 moderate
Support: 1.2963 minor / 1.2935 strong / 1.2900 minor
Euro has a high spinning top for its monday candle with prices just around the floor of a broadening pattern. Among indicators we have daily EMA lines beginning to cross lower while macd’s are dropping and stochastic is oversold. In the lower time frames we are seeing mixed signals with stochastic crossing lower and macd’s seeing a bullish cross in 4H charts. Hourly indicators for their part has a bullish cross in stochastic and macd’s at risk of a bear cross. At this point given the strength of our support we may opt to just remain sidelined perhaps looking for a bounce off the broadening tops, support line though any hourly close below 1.2935 will likely trigger the next down leg to 1.2744.
Source: http://www.fxinstructor.com/blog/asian-session-notes-51413
