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EURJPY
Resistance: 122.70 minor / 123.06 moderate / 123.50 moderate
Support: 121.19 minor / 121.62 moderate / 121.08 moderate
Markets saw a sharp sell-off at the open of Wellington trade as Cyprus over the weekend decided to slap deposits with a one-time tax. We have EURJPY selling off to the 55D EMA in Wellington trade though seeing a bounce there after. Among indicators the news has pulled daily stochastic into oversold levels while macd’s has also crossed lower. Note we now have a double top in the weekly charts following the gap down. In the 4H picture we have prices just around the 23.6 Fib of the drop from Friday high, 122.57, with stochastic trying to come-off oversold area though macd is heading lower. Hourly charts is similarly seeing a bullish cross in stochastic and bearish macd. Given the extent of the earlier gap and sell-off along with talk of renogotiating the levy, we are looking for markets to try to cover the gap, a bounce to atleast the 34D EMA at 123.06.
EURGBP
Resistance: 0.8575 moderate / 0.8602 minor / 0.8631 minor
Support: 0.8532(35) moderate / 0.8449 moderate / 0.8363 moderate
After gapping down at the open of Wellington market for the week we had EURGBP seeing a further sell-off to see sub 55D EMA levels by the time Japanese markets opened. We have now triggered a daily level double top with pattern target at 0.8338. Looking at indicators we have daily stochastic oversold and macd’s opening lower. In intraday charts we have 4H macd’s and stochastic heading lower while at the hourly level we have stochastic oversold and macd heading down. Note we have already seen the average daily range within two hours of markets reopening for the week For now we prefer looking for a sell on rallies to the 0.8575 moderate resistance. Going forward we expect to see a substantial reversal of the gains in EURGBP for the year.
USDJPY
Resistance: 95.00 psychological / 95.43 minor / 95.88 minor
Support: 94.16 minor / 94.14 strong / 93.79 moderate
Friday saw USDJPY closing under the earlier lows for the week and around the day’s lows to suggest a bearish breakout following a mostly ranging trading week. Daily indicators already have stochastic heading for oversold levels then with macd’s now crossing lower. Note given the turmoil caused by the Cypriot bank levy we expect to see a risk averse market for the day. From the lower time frames we have mixed signals out of 4H stochastic and mace the former coming out of oversold levels as we almost fully covered the gap from the open. Note we have a double top triggered in the 4H candlesticks. Hourly charts for their part has price action suggesting a loss of momentum with short covering already done and market likely to head down again though stochastic is still pointing up. For now immediate objective will be a retest of the days lows at 94.14 a strong support level possibly a drop to the 34D EMA at 93.79.
