Asia Closing: 78.0 remain in focus for USD/JPY while Equities remain supported.

USD/JPY H1

Potential break below consolidation range found on 8th – 10th Oct? Price also traded below 78.0 briefly before bulls push prices back up to Yesterday’s low of 78.12. Failure of bulls to keep price above Yesterday’s low will put initiative back into Bears hands.

AUD/USD H1

Price extended this week’s bull run on the back of strong Employment figures from Australia. Bulls were unable to push above the upward trendline but neither were bears able to keep price below Yesterday’s High. Right now it appears that Bulls would like to test the trendline once more. Upside target could be confluence of H5 and upward trendline while downside risk  may be supported between Yesterday’s High and H3, with a break below exposing this week’s trading range between 1.018 to 1.025.

NZD/USD H1

Aussie rallied spilled over to Kiwi as prices rebounded a little bit. Current price level sitting around support/resistance point found on 3rd, 4th and also 9th Oct, with H3 – H4 acting as significant overhead resistance for bulls.

Hang Seng Index Futures M15

Another topsy-turvy day for HSI as price gapped lower, but recovered almost immediately with price hitting 21,000 just around closing session. Interestingly, shape of today’s price action looks similar to to yesterday’s. Bulls will be gutted not able to stay above 21,000, but bears would also be wary to sell after 2 days of failed attempts.

Nikkei 225 Futures H1

Asian session spells a rare victory for bulls this week as price resisted going lower and pushed up back to Yesterday’s range. However bulls were not able to break above H3-H4 resistance zone and is currently trading slightly below H3. Price could trade within Asian range during US hours with L3-L4 acting as support against further selling.

Bottomline:

USD/JPY reflects strong bearish sentiment which is echoed by Bank of Korea cutting growth forecasts for 2012 and 2013. However, that bearish sentiment is not observable in other currencies and equities, which remain broadly supported today. This development does lower the possibility of USD/JPY breaking lower, and perhaps the recent price action could prove to be a false breakout. Another alternate view is that USD/JPY represent the true bearishness of the market, which will be observable in all other Asian assets after their bullish correction is over.

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