(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. Spot USD/CNY's pullback Wednesday has not nullified the bullish technical bias seen on the daily chart. The 6.1616 base of the daily Bollinger uptrend channel now supports USD/CNY and if intact by Thursday's close, may form a base off which the dollar could rebound higher. The yuan recouped from steep losses earlier this week as stocks on the Shanghai index rebounded. But fears of further tightening of short-term loans could keep stocks and the yuan on tenterhooks. The recent change in collateral requirements by China's central securities clearing house sparked a selloff in bonds and stocks and hammered the yuan by proxy. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.1616 (base of the daily Bollinger uptrend channel), then at 6.1500 (round-figure trading barrier), before 6.1432 (20-day Bollinger mid support). Immediate resistance is at 6.1800 (top of daily Bollinger uptrend channel), then at 6.2000 (round-figure trading barrier).
USD/TWD--uptrend. USD/TWD remains in the daily Bollinger uptrend channel, which forecasts more near-term weakness for the Taiwan dollar versus the U.S. dollar. USD/TWD has been more aligned with the rise of USD/CNY instead of its previous affiliation with regional lead indicator USD/JPY, which has fallen considerably over the last two days. But the offshore market is pricing the benchmark 1-month USD/TWD nondeliverable forward contract at a steeper discount than Wednesday, suggesting that short-term speculators are turning bearish on the dollar. Dow Jones technical analysis suggests immediate support is at 31.130 (base of daily Bollinger uptrend channel), then at 31.000 (round-figure trading barrier), before 30.980 (20-day Bollinger mid support). Immediate resistance is likely at 31.290 (top of daily Bollinger uptrend channel), then at 31.500 (psychological resistance), before 31.880 (top of monthly Ichimoku Cloud resistance zone).
USD/KRW--possible downtrend. USD/KRW has stepped into the daily Bollinger downtrend channel after a series of steep drops in lead indicator USD/JPY tanked the benchmark ICE U.S. dollar index. The dollar index's recent decline is weighing on several other USD/Asia currency pairs as well. If USD/KRW ends the day below 1,100 -- the entrance of the downtrend channel -- there could be more U.S. dollar downside to come. The Bank of Korea will announce its monetary policy decision at 0100 GMT. While most analysts expect no change in the bank's base interest rate till early next year, there is the off-chance of a growth-stimulating rate-cut, which would be negative for the won. Dow Jones technical analysis suggests immediate support is at 1,094 (base of daily Bollinger downtrend channel), then at 1,090 (round-figure trading barrier). Immediate resistance is at 1,100 (top of daily Bollinger downtrend channel), then at 1,107 (20-day Bollinger mid resistance), before 1,114 (daily Bollinger uptrend channel).
USD/SGD--consolidation lower. USD/SGD is likely to consolidate lower toward 1.3060 due to profit-taking. Wednesday's fall out of the daily Bollinger uptrend channel -- a sign that the bullish technical bias has ended -- could motivate trimming of long-USD positions. The U.S. dollar has declined substantially in recent days due to U.S. Treasury yields falling as investors dump riskier assets for safe haven ones such as U.S. government bonds. The fall of lead indicator USD/JPY, which may have tad more room to go, has also been weighing on USD/SGD. Dow Jones technical analysis shows immediate support is at 1.3060 (20-day Bollinger mid support), then at 1.3000 (round-figure rading barrier), before 1.2984 (daily Bollinger downtrend channel). Immediate resistance is at 1.3100 (round-figure trading barrier), then at 1.3135 (daily Bollinger uptrend channel), before 1.3150 (psychological resistance).
USD/MYR--uptrend. USD/MYR has stayed aloft despite a broad weakening of the U.S. dollar that has dragged some USD/Asia currency pairs lower. The daily Bollinger uptrend channel will remain in effect if USD/MYR closes Thursday above 3.4580. The bullish chart indicator suggests USD/MYR could rally as high as 3.5140 in the near term. The continued collapse of crude oil prices is the reason why Malaysia's ringgit remains weak versus the U.S. dollar. Malaysia is Asia's only net oil exporter. Malaysia releases its October industrial production index at 0401 GMT. Dow Jones technical analysis suggests immediate support is at 3.4800 (psychological trading barrier), then at 3.4580 (base of daily Bollinger uptrend channel), before 3.4500 (psychological support). Immediate resistance is at 3.5000 (round-figure trading barrier), then at 3.5140 (top of daily Bollinger uptrend channel), before 3.5200 (psychological trading barrier).
USD/THB--possible downtrend. USD/THB has dropped sharply over the last two days as regional lead indicator USD/JPY tanked. The dollar is now testing the entrance to the daily USD/THB Bollinger uptrend channel at 32.75. A Thursday close below this mark would be a bearish chart signal that could incite more selling of the U.S. dollar toward the immediate target of 32.59 - the daily Ichimoku Cloud support zone. 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 32.96 (daily Bollinger uptrend channel), before 33.00 (round-figure trading barrier).
USD/PHP--downtrend. USD/PHP will retain its bearish technical bias if it ends Thursday below 44.69 and thus within the daily Bollinger downtrend channel. But if it closes above this technical resistance, dollar short-covering and thereby peso weakness may be ahead. Wednesday's spike in USD/PHP, which was contrary to the broad fall of the U.S. dollar in the region, may have been due to weaker-than-expected Philippine export growth. But the peso may also be suffering from risk aversion as stocks worldwide retreat due to falling crude oil prices. The peso has been rising in recent weeks due to increased remittance volumes by overseas workers before Christmas. The Philippine central bank meets later today to decide on monetary policy; analysts expect no change in its slightly hawkish stance. Dow Jones technical analysis suggests immediate support is at 44.53 (base of daily Bollinger downtrend channel), then at 44.50 (psychological support), before 44.27 (base of daily Ichimoku Cloud support). Immediate resistance is likely at 44.69 (top of daily Bollinger downtrend channel), then at 44.84 (top of daily Ichimoku Cloud and 20-day Bollinger mid resistance), before 45.00 (round-figure trading barrier and daily Bollinger uptrend channel).
USD/IDR--uptrend. USD/IDR remains on an upward path despite widespread U.S. dollar weakness. The Bollinger uptrend channel remains in play as long as USD/IDR stays above 12,300 at Thursday's close. The sharp fall of the U.S. dollar index has had little impact on USD/IDR so far, possibly due to the developing theme of global risk aversion. As crude oil prices remain depressed on tempered demand expectations for 2015, investors are worried that Indonesia will struggle to grow. Weak global growth is a reason that analysts expect Bank Indonesia to keep its monetary policy unchanged today, despite the threat of inflation. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 12,300 (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 12,370 (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--possible uptrend. If USD/INR stays above 62.00 by Thursday's close, the daily Bollinger uptrend channel will be affirmed and could lead the dollar higher in the near term. Broad U.S. dollar weakness triggered by Japan's yen rising sharply overnight could however thwart the bullish USD/INR bias. Traders are struggling to weigh the conflicting factors of falling crude oil prices, which is good for India's current account deficit but negative for global growth expectations. Generally, investors are still optimistic on India because Prime Minister Narender Modi has been aggressively courting foreign investment and implementing domestic changes to boost economic growth. Dow Jones technical analysis suggests immediate support is at 62.00 (round-figure trading barrier and base of daily Bollinger uptrend channel), then at 61.87 (20-day Bollinger mid support), before 61.83 (October trendline support). Immediate resistance is likely at 62.11 (top of daily Bollinger uptrend channel), then at 62.27 (top of weekly Bollinger uptrend channel), before 62.50 (psychological resistance).
(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 10, 2014 20:12 ET (01:12 GMT)
Write to Ewen Chew at ewen.chew@wsj.com
(MORE TO FOLLOW) Dow Jones Newswires
December 10, 2014 20:12 ET (01:12 GMT)
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