(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.)
USD/CNY--downtrend. The technical downtrend bias for spot USD/CNY remains intact, though the slope of the Bollinger downtrend channel is still gradual, suggesting a slow pace of yuan appreciation in the near term. Spot USD/CNY has been making fresh 7-month lows over the last two days but could rebound slightly Thursday due to a an overnight rally in the U.S. dollar index--which ought to steer the PBOC's USD/CNY benchmark rate upwards. The HSBC China flash manufacturing PMI for October due at 0145 GMT is in focus--a reading below last month's 50.2 could spark regional risk aversion. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.1150 (base of daily Bollinger downtrend channel), before 6.1000 (round-figure trading barrier). Immediate resistance is at 6.1233 (top of daily Bollinger downtrend channel), then at 6.1317 (20-day Bollinger mid resistance), before 6.1400 (daily Bollinger uptrend channel).
USD/TWD--consolidation, possible uptrend. The technical consolidation zone for spot USD/TWD is narrowing as the Bollinger midline support rises. The overnight strength of the U.S. dollar index due to risk aversion creeping back into equity markets may lift USD/TWD into the Bollinger uptrend channel at 30.430. The catalyst for Asian currencies could be China's HSBC flash manufacturing PMI due at 0145 GMT. A weak reading could exacerbate the sense of risk aversion amongst emerging market investors. The price of the USD/TWD 1-month nondeliverable forward contract--a gauge of speculative sentiment--may rise toward that of the spot contract if demand for the safe haven U.S. dollar increases. Dow Jones technical analysis suggests immediate support is at 30.390 (20-day Bollinger mid support), then at 30.350 (daily Bollinger downtrend channel), before 30.310 (base of daily Bollinger downtrend channel). Immediate resistance is likely at 30.430 (daily Bollinger uptrend channel), then at 30.470 (top of daily Bollinger uptrend channel), before 30.500 (psychological trading barrier).
USD/KRW--consolidation. The South Korean won weakens at its opening, factoring in the overnight rise of the benchmark ICE U.S. dollar index due to risk aversion returning. The daily USD/KRW chart suggests consolidation continues in the near term within a fairly broad range of 1,048-1,068. The respective entrances to the Bollinger downtrend and uptrend channels are likely to deflect bigger moves by the U.S. dollar. The release of China's flash manufacturing PMI at 0145 GMT could be the catalyst for more near-term volatility in Asian currencies. A reading below the previous month's 50.2 could trigger safe-haven U.S. dollar buying. Dow Jones technical analysis suggests immediate support is at 1,050 (round-figure trading barrier), then at 1,048 (daily Bollinger downtrend channel), before 1,038 (base of daily Bollinger downtrend channel). Immediate resistance is at 1,058 (20-day Bollinger mid resistance), then at 1,060 (round-figure trading barrier), before 1,068 (daily Bollinger uptrend channel).
USD/SGD--consolidation higher. USD/SGD likely rises toward the higher end of its current consolidation range as mild risk aversion sent the U.S. dollar index higher overnight. The daily chart suggests directional momentum will be lacking unless USD/SGD closes Thursday within the Bollinger uptrend channel at 1.2763. The greenback rose overnight as stocks slipped for the first time this week on fears of terrorist attacks on U.S. soil after a suspected terror-related shooting incident in Canada. The U.S. dollar is also firmer as the yield of the benchmark 10-year U.S. Treasury bill stays above 2.2%. China's October HSBC flash manufacturing PMI data due at 0145 GMT could be the next volatility catalyst. Dow Jones technical analysis shows immediate support is at 1.2710 (daily Bollinger downtrend channel), then at 1.2700 (round-figure trading barrier), before 1.2683 (base of daily Bollinger downtrend channel). Immediate resistance is at 1.2737 (20-day Bollinger mid), then at 1.2763 (daily Bollinger uptrend channel), before 1.2789 (top of daily Bollinger uptrend channel).
USD/MYR--consolidation higher. USD/MYR may rise toward 3.2750 where the Bollinger uptrend channel begins and then consolidate. The overnight fall of U.S. stocks and oil prices has been a damper on risk-taking in Asia Thursday. Emerging market currencies are mildly weaker at the open as traders await the China HSBC flash manufacturing PMI due at 0145 GMT for a stronger lead. A print lower than last month's 50.2 could add fuel to the risk aversion flame. If USD/MYR closes Thursday above 3.2750 it would activate the Bollinger uptrend channel that might lead to more ringgit weakness in the near term. Dow Jones technical analysis suggests immediate support is at 3.2640 (20-day Bollinger mid support), then at 3.2540 (daily Bollinger downtrend channel), before 3.2500 (round-figure trading barrier). Immediate resistance is at 3.2750 (daily Bollinger uptrend channel), then at 3.2850 (top of daily Bollinger uptrend channel), before 3.3000 (round-figure trading barrier).
USD/THB--closed.
USD/PHP--consolidation higher. Ahead of the Philippine central bank's interest rate decision--due at 0800 GMT--the peso may weaken due to overnight risk aversion. The dollar is broadly higher--though by a mild extent--in Asia after U.S. stocks fell Wednesday. The possibility of terror attacks on U.S. soil after a suspected terror-related shooting incident in Canada has investors jittery. If USD/PHP rallies into the Bollinger uptrend channel at 44.90 there could be sustained peso weakness against the U.S. dollar in the near term. Most analysts expect the Phiippine central bank to keep interest rates unchanged, while some forecast a mild tightening through raising of rates on the special deposit account. Recent tepid Philippine inflation data has dampened the chances of a peso-positive interest rate hike. Dow Jones technical analysis suggests immediate support is at 44.79 (20-day Bollinger mid support), then at 44.67 (daily Bollinger downtrend channel), before 44.56 (base of daily Bollinger downtrend channel). Immediate resistance is likely at 44.90 (daily Bollinger uptrend channel), then at 45.00 (round-figure trading barrier), before 45.01 (top of daily Bollinger uptrend channel).
USD/IDR--rebound higher. USD/IDR could rally out of the Bollinger downtrend channel as risk aversion makes a tentative comeback. The U.S. dollar is broadly stronger following a drop in U.S. stocks overnight on fears of terrorist attacks on U.S. soil. The trigger for overnight investor anxiety was a suspected terror-related shooting incident in Canada. USD/IDR may lose its bearish technical bias on a Thursday close above the 12,060 ceiling of the Bollinger downtrend channel. From there, the dollar could consolidate higher toward the 20-day Bollinger mid line at 12,140. Domestic politics continue to be a strong factor in the rupiah's near-term value as investors await the announcement of president Joko Widodo's cabinet. The announcement of the cabinet line-up has been delayed after eight candidates failed a corruption test. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 12,000 (round-figure trading barrier), then at 11,970 (base of daily Bollinger downtrend channel), before 12,860 (daily Ichimoku Cloud support zone). Immediate resistance is at 12,060 (top of daily Bollinger uptrend channel), then at 12,140 (20-day Bollinger mid), before 12,230 (daily Bollinger uptrend channel).
USD/INR--closed.
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
October 22, 2014 20:53 ET (00:53 GMT)
0 Response to "USD/Asia Rises as U.S.Stocks Fall"
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