The following are projected trading ranges and outlooks for nine secondary currency pairs in Asia today:
(Ranges are calculated using recent highs and lows, information on the placement of option strikes, and technical analysis--Bollinger Bands, Fibonacci levels, trendlines and moving averages.)
Immediate Range Larger Range
USD/CNY 6.1475-6.1611 6.1339-6.1748
USD/TWD 29.960-30.000 29.800-30.020
USD/KRW 1,020-1,021 1,015-1,023
USD/SGD 1.2486-1.2500 1.2477-1.2528
USD/MYR 3.1640-3.1800 3.1500-3.1900
USD/THB 31.88-32.00 31.75-32.16
USD/PHP - -
USD/IDR 11,620-11,720 11,520-11,780
USD/INR 60.40-60.79 60.00-61.00
USD/CNY--consolidation higher. Spot USD/CNY is likely to rise on the back of another jump in the U.S. dollar index - which influences the PBOC's daily yuan benchmark rate-setting. If USD/CNY ends Monday above 6.1748 and thus inside the daily Bollinger uptrend channel, there could be sustained U.S. dollar strength in the near term. The uptrend channel could guide the yuan weaker to 6.2080 where the daily Ichimoku Cloud resistance zone awaits. The sharp rise of the U.S. dollar index was triggered by another bout of weakness in the euro which fell below the 1.3200 round-figure trading barrier versus the greenback. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.1475 (daily Bollinger downtrend channel), then at 6.1339 (base of daily Bollinger downtrend channel), before 6.1000 (round-figure trading barrier and March low). Immediate resistance is at 6.1611 (20-day Bollinger mid resistance), then at 6.1748 (daily Bollinger uptrend channel), before 6.1884 (top of daily Bollinger uptrend channel).
USD/TWD--possible uptrend. USD/TWD is likely to climb out of the daily Ichimoku Cloud resistance zone and may enter the daily Bollinger uptrend channel that begins at 30.020. A Monday close above that level would impart positive technical momentum toward the weekly Bollinger uptrend channel at 30.120. The market is awaiting Taiwan's industrial output data due at 0800 GMT. Expectations may be slightly dampened by weaker-than-expected export data released on Friday. On Friday, the Taiwan central bank was said to have been supporting USD/TWD around the 29.970 level in order to keep the local currency from becoming too strong versus the U.S. dollar. Dow Jones technical analysis suggests immediate support is at 29.960 (daily Bollinger downtrend channel), then at 29.940 (base of daily Bollinger downtrend channel and base of daily Ichimoku Cloud support), before 29.800 (psychological support). Immediate resistance is likely at 29.990 (20-day Bollinger mid resistance), then at 30.000 (round figure trading barrier and top of daily Ichimoku Cloud resistance), before 30.020 (daily Bollinger uptrend channel).
USD/KRW--consolidation higher. USD/KRW bounces to the top of the daily Bollinger downtrend channel as traders react to a sharply higher U.S. dollar index. The bearish technical bias for USD/KRW will however remain intact as long as it ends Monday below 1,021 and therefore within the Bollinger downtrend channel and also beneath the Ichimoku Cloud resistance zone. But if USD/KRW closes the day above 1,023, it would be above the Ichimoku Cloud and thus more likely to rise again. The fall of the EUR/USD past its 1.3200 round-figure trading barrier is creating upwards pressure on the U.S. dollar in Asia. Dow Jones technical analysis suggests immediate support is at 1,020 (round-figure trading barrier), before 1,015 (base of daily Bollinger downtrend channel). Immediate resistance is at 1,021 (top of daily Bollinger downtrend channel), then at 1,023 (daily Ichimoku Cloud resistance zone), before 1,027 (20-day Bollinger mid resistance).
USD/SGD--possible uptrend. USD/SGD is rising into the Bollinger uptrend channel as the U.S. dollar index spikes to a nearly one-year high. The daily chart will flash a bullish signal on a Monday close above 1.2503 - which would place USD/SGD inside the uptrend channel and above the Ichimoku Cloud resistance zone. The bullish bias could take USD/SGD up to the weekly Ichimoku Cloud resistance zone at 1.2560. Singapore's July consumer price index report will be published at 0500 GMT. Dow Jones technical analysis shows immediate support is at 1.2486 (daily Ichimoku Cloud support zone), then at 1.2477 (20-day Bollinger mid), before 1.2455 (entrance to Bollinger downtrend channel). Immediate resistance is at 1.2500 (round-figure trading barrier), then at 1.2503 (entrance to daily Bollinger uptrend channel), then at 1.2528 (top of daily Bollinger uptrend channel), before 1.2560 (weekly Ichimoku Cloud resistance zone).
USD/MYR--consolidation higher. USD/MYR gaps higher to open at 3.1640 versus its Friday close of 3.1600 as traders react to the much stronger U.S. dollar index. The greenback is broadly up as the market factors in dovish rhetoric from European Central Bank chairman Mario Draghi, resulting in a sharply weaker EUR/USD. USD/MYR will lose its bearish technical bias on a Monday close above 3.1640 and could instead rise toward the 20-day Bollinger mid resistance line at 3.1820. Dow Jones technical analysis suggests immediate support is at 3.1640 (daily Bollinger downtrend channel), then at 3.1500 (round-figure trading barrier), before 3.1450 (base of daily Bollinger downtrend channel). Immediate resistance is at 3.1800 (round-figure trading barrier), before at 3.1820 (20-day Bollinger mid resistance), before 3.1900 (daily Ichimoku Cloud resistance zone).
USD/THB--consolidation higher. USD/THB may rise within its consolidation range of 31.88-32.00. The U.S. dollar is climbing across the USD/Asia spectrum following a sharp drop in EUR/USD due to dovish rhetoric from the European Central Bank. Positive local undertones may however help the baht to fend off steeper losses to the greenback. Last week's third consecutive rise in Thailand's industrial sentiment indicator shows that investors are gaining confidence in the junta's efforts to jumpstart the Thai economy. Dow Jones technical analysis suggests immediate support is at 31.88 (daily Bollinger downtrend channel), then at 31.80 (psychological support), before 31.75 (base of daily Bollinger downtrend channel). Immediate resistance is at 32.00 (round-figure trading barrier and 20-day Bollinger mid line), then at 32.16 (daily Bollinger uptrend channel and Ichimoku Cloud resistance zone), then at 32.28 (top of daily Bollinger uptrend channel).
USD/PHP--closed.
USD/IDR--consolidation higher. USD/IDR is likely to bounce back up to the daily Ichimoku Cloud resistance zone at 11,720. The greenback has been boosted in Asia due to the EUR/USD pair dropping sharply, sending the U.S. dollar index much higher. The Indonesia rupiah could hence weaken Monday, though to a limited extent due to multiple technical barriers which ought to stall the greenback between 11,720 and 11,780. If, however, USD/IDR ends Monday above 11,780, there is likely to be more U.S. dollar upside this week. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 11,620 (daily Bollinger downtrend channel), before 11,520 (base of daily Bollinger downtrend channel). Immediate resistance is at 11,720 (daily Ichimoku Cloud resistance zone), then at 11,750 (daily Bollinger uptrend channel), before 11,780 (top of Ichimoku Cloud resistance zone).
USD/INR--consolidation. USD/INR could be prevented from entering the daily Bollinger downtrend channel due to a broadly stronger U.S. dollar. The USD/INR pair may bounce off the 60.40 entrance to the Bollinger downtrend channel and head back up to the 20-day Bollinger mid resistance line at 60.79. The Indian rupee has recently been less reactive to fluctuations in the U.S. dollar index compared to its peers. This suggests that strong sellers have been capping the dollar's attempts to rally - a sign of demand for the Indian rupee. Hence, any spikes in USD/INR might be met with renewed selling by the rupee-bulls. Dow Jones technical analysis suggests immediate support is at 60.40 (daily Bollinger downtrend channel), before 60.00 (round-figure trading barrier). Immediate resistance is likely at 60.79 (20-day Bollinger mid), then at 61.00 (round-figure trading barrier), before at 61.18 (daily Bollinger uptrend channel).
Write to Ewen Chew at ewen.chew@dowjones.com
(This article is general financial information, not personalized investment advice, as it does not consider the unique circumstances affecting an individual reader's decision to buy or sell a specific security. Dow Jones does not warrant the accuracy, completeness or timeliness of the information in this article, and any errors will not be made the basis for any claim against Dow Jones. The author does not invest in the instruments or markets cited in this article.)
(END) Dow Jones Newswires
August 24, 2014 20:51 ET (00:51 GMT)
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