(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--uptrend. The bullish technical bias for spot USD/CNY has been reaffirmed by Thursday's bounce off the base of the daily Bollinger uptrend channel. The dollar is now more likely to rise again, especially after the benchmark U.S. dollar index rebounded overnight after dropping for three straight days. Spot USD/CNY could mark a new five-month high if it surpasses Tuesday's peak of 6.2064. Shanghai stocks will likely be driven by economic data due later. China releases its November retail sales and industrial output data at 0530 GMT. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.1668 (base of daily Bollinger uptrend channel), then at 6.1500 (round-figure trading barrier), before 6.1464 (20-day Bollinger mid support). Immediate resistance is at 6.2000 (round-figure trading barrier), then at 6.2064 (5-month peak), before 6.2500 (psychological resistance).
USD/TWD--uptrend. USD/TWD likely continues to climb along the daily Bollinger uptrend channel toward the top of the monthly Ichimoku Cloud resistance zone at 31.880. There has been no let-up in the greenback's rally against the Taiwan dollar despite recent weakness seen in USD/JPY and the broader U.S. dollar index. Taiwan's central bank continues to prop up USD/TWD in the spot market, engingeering weakness for its currency. But the offshore market is pricing the benchmark 1-month USD/TWD nondeliverable forward contract at a discount to the spot contract price, suggesting that short-term speculators are slightly bearish on the dollar. Dow Jones technical analysis suggests immediate support is at 31.150 (base of daily Bollinger uptrend channel), then at 31.000 (round-figure trading barrier and 20-day Bollinger mid support), before 30.850 (daily Bollinger downtrend channel). Immediate resistance is likely at 31.310 (top of daily Bollinger uptrend channel), then at 31.500 (psychological resistance), before 31.880 (top of monthly Ichimoku Cloud resistance zone).
USD/KRW--consolidation higher. USD/KRW has rebounded well above the 1,100 round-figure trading barrier, thus avoiding the gravity of the daily Bollinger downtrend channel, which begins at 1,102. The daily chart suggests USD/KRW could creep higher within a consolidation range of 1,102-1,114. Most USD/Asia currency pairs are up following the overnight rally of the U.S. dollar that was triggered by a jump in U.S. retail sales data, which upped investors' expectations for an earlier rate hike by the U.S. Federal Reserve. On Thursday, the Bank of Korea kept interest rates unchanged as expected. Some analysts forecast a growth-stimulating rate cut in the medium term -- which would be negative for the won. Dow Jones technical analysis suggests immediate support is at 1,1102 (daily Bollinger downtrend channel), then at 1,100 (round-figure trading barrier), before 1,095 (base of daily Bollinger downtrend channel). Immediate resistance is at 1,108 (20-day Bollinger mid resistance), then at 1,114 (daily Bollinger uptrend channel), before 1,120 (round-figure trading barrier).
USD/SGD--uptrend may return. USD/SGD may attempt to re-enter the daily Bollinger uptrend channel at 1.3145 as the U.S. dollar gained overnight on stronger U.S. retail sales as well as an upbeat weekly jobless claims report. A rebound in regional lead indicator USD/JPY may be key to a resumption of the USD/SGD rally. If USD/JPY climbs back above the 120.00 round-figure trading barrier, USD/SGD will likely follow higher. On Thursday, investors sold U.S. government bonds, sending yields higher, on the possibility that the U.S. Federal Reserve will be encouraged by improving economic data to raise interest rates sooner. Dow Jones technical analysis shows immediate support is at 1.3100 (round-figure rading barrier), then at 1.3070 (20-day Bollinger mid support), before 1.3000 (round-figure rading barrier). Immediate resistance is at 1.3145 (daily Bollinger uptrend channel), then at 1.3200 (round-figure trading barrier), before 1.3221 (top of daily Bollinger uptrend channel).
USD/MYR--uptrend. USD/MYR is likely to reclaim the 3.5000 round-figure trading barrier due to overnight greenback strength triggered by upbeat U.S. economic data. The bullish chart indicator of the Bollinger uptrend channel suggests USD/MYR could rally as high as 3.5250 in the near term. The continued collapse of crude oil prices, which fell below $60/barrel Thursday, is the reason why Malaysia's ringgit will remain under pressure. Malaysia is Asia's only net oil exporter. Malaysia's October industrial production index beat expectations on Thursday with a 5.0% on-year gain versus expectations for a 3.9% rise. Analysts said mining output rose, possibly to mitigate overall revenue drops due to the fall in oil prices. Dow Jones technical analysis suggests immediate support is at 3.4800 (psychological trading barrier), then at 3.4670 (base of daily Bollinger uptrend channel), before 3.4500 (psychological support). Immediate resistance is at 3.5000 (round-figure trading barrier), then at 3.5250 (top of daily Bollinger uptrend channel), before 3.5500 (psychological trading barrier).
USD/THB--consolidation higher. USD/THB is likely to inch higher within a technical consolidation zone spanning 32.75-32.89. The lower and upper Bollinger bands (standard deviation 1) demarcate the respective entrances of the daily Bollinger downtrend and uptrend channels. Unless USD/THB breaks out of this technical rut, near-term momentum is likely to be lacking. Overnight U.S. dollar strength owing to a rise in U.S. Treasury yields -- triggered by strong U.S. retail sales -- is gradually lifting most USD/Asia currency pairs Friday. Dow Jones technical analysis suggests immediate support is at 32.75 (daily Bollinger downtrend channel), then at 32.67 (base of daily Bollinger downtrend channel), before 32.59 (daily Ichimoku Cloud support zone). Immediate resistance is at 32.82 (20-day Bollinger mid resistance), then at 32.89 (daily Bollinger uptrend channel), before 33.00 (round-figure trading barrier).
USD/PHP--downtrend. USD/PHP likely retains its bearish technical bias -- implying peso strength versus the dollar ahead -- despite the overnight rise of the benchmark U.S. dollar index. USD/PHP could slide further to the 44.27 base of the daily Ichimoku Cloud support. The peso's appeal to investors has been boosted by Moody's upgrading the Philippines' credit rating by one notch to Baa2 -- placing it higher than Indonesia on the scale. On Thursday, the Philippine central bank kept interest rates unchanged as expected, recognizing that economic growth may ease. Dow Jones technical analysis suggests immediate support is at 44.47 (base of daily Bollinger downtrend channel), then at 44.27 (base of daily Ichimoku Cloud support and 200-day moving average), before 44.00 (round-figure trading barrier). Immediate resistance is likely at 44.65 (top of daily Bollinger downtrend channel), then at 44.82 (20-day Bollinger mid resistance), before 44.85 (top of daily Ichimoku Cloud).
USD/IDR--uptrend. USD/IDR's bullish technical bias will likely be augmented by broad U.S. dollar strength overnight. The dollar rose as U.S. retail sales beat expectations, boding well for the consumer-driven U.S. economy. USD/IDR could reach for the 12,380 top of the daily Bollinger uptrend channel and then aim for the Nov. 2008 high of 12,600. The Bollinger uptrend channel remains in play as long as USD/IDR stays above 12,310 at Friday's close. On Thursday, Bank Indonesia kept its monetary policy unchanged as expected, following the November hike in conjunction with the government's fuel-price hike. The central bank said that the inflationary effect of the recent fuel-price hike will peter out in three months. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 12,310 (base of daily Bollinger uptrend channel), then at 12,230 (20-day Bollinger mid support), before 12,160 (daily Bollinger downtrend channel). Immediate resistance is at 12,380 (top of daily Bollinger uptrend channel), then at 12,440 (top of weekly Bollinger uptrend channel), before 12,500 (round-figure trading barrier).
USD/INR--uptrend. USD/INR may rally again Friday as the U.S. dollar index jumped overnight on improved U.S. retail sales data. On Thursday, USD/INR broke through the technical double-top formation that appeared in late November-December and hit a new 10-month peak of 62.47. The lack of central bank intervention on Thursday -- which some traders had been expecting because the Reserve Bank of India had stepped in to buoy the rupee at similar levels in November -- may have sparked USD-short covering. While the rupee could depreciate against the greenback, it is still widely expected to outperform its emerging market peers in the medium term. Investors are still optimistic on India because Prime Minister Narender Modi has been aggressively courting foreign investment -- most recently with Russia -- and implementing domestic changes to boost economic growth. Dow Jones technical analysis suggests immediate support is at 62.24 (previous double-top), then at 62.10 (base of daily Bollinger uptrend channel), before 62.00 (round-figure trading barrier). Immediate resistance is likely at 62.50 (psychological resistance), before 63.00 (round-figure trading barrier).
(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
December 11, 2014 20:05 ET (01:05 GMT)
Write to Ewen Chew at ewen.chew@wsj.com
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December 11, 2014 20:05 ET (01:05 GMT)
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