(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--consolidation. The People's Bank of China may set the daily benchmark USD/CNY rate lower due to the overnight pullback of the U.S. dollar index. Spot USD/CNY could thus be weighed toward the 6.1998 entrance to the daily Bollinger downtrend channel. But if this chart barrier holds, the pair may consolidate in a range of 6.1998-6.2189, capped by the entrance to the Bollinger uptrend channel. The yuan gained on Wednesday as optimism for easing measures by the Chinese central bank boosted stocks, sending the main Shanghai composite index up nearly to the level before the crash triggered by the margin-trading clampdown. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2094 (20-day Bollinger mid support), then at 6.2000 (round-figure trading barrier) , then at 6.1998 (daily Bollinger downtrend channel), before 6.1900 (base of daily Bollinger downtrend channel). Immediate resistance is at 6.2189 (daily Bollinger uptrend channel), then at 6.2285 (top of daily Bollinger uptrend channel), before 6.2500 (round-figure trading barrier).
USD/TWD--downtrend. USD/TWD has fallen back into the daily Bollinger downtrend channel after a failed attempt Wednesday to rally. The bearish bias of the downtrend channel could lead USD/TWD to the daily Ichimoku Cloud support zone at 31.130 in the days ahead. The U.S. dollar index subsided overnight following weakness in USD/JPY and a slight uptick in the euro. If the European Central Bank monetary policy decision due later today disappoints the market with muted easing measures, the euro could surge higher and depress the greenback broadly. Dow Jones technical analysis suggests immediate support is at 31.410 (base of daily Bollinger downtrend channel), then at 31.200 (psychological support), before 31.130 (daily Ichimoku Cloud support). Immediate resistance is likely at 31.580 (top of daily Bollinger uptrend channel), then at 31.750 (20-day Bollinger mid resistance), before 31.910 (daily Bollinger uptrend channel).
USD/KRW--possible downside. USD/KRW lingers at the edge of the Ichimoku Cloud support and the entrance to the daily Bollinger downtrend channel, treading water before the likely market-moving monetary policy decision by the European Central Bank due later. A Thursday close below 1,083 would activate the downtrend channel and place USD/KRW below the Cloud support, paving the way for a much steeper fall. Expectations are high for the ECB to ease monetary policy by expanding its bond-buying program - which would be negative for the euro and thereby positive for the dollar. But sources close to the ECB have mentioned a likely size of the bond-buying program to be announced today - which could mean that euro downside has already been factored in and hence EUR/USD could bounce instead, thus dragging USD/Asia lower. Dow Jones technical analysis suggests immediate support is at 1,083 (base of daily Ichimoku Cloud support and entrance to daily Bollinger downtrend channel), before 1,074 (base of daily Bollinger downtrend channel). Immediate resistance is at 1,090 (round-figure trading barrier), then at 1,092 (20-day Bollinger mid resistance), before 1,100 (round-figure trading barrier).
USD/SGD--consolidation. USD/SGD is capped by the 1.3361 entrance to the daily Bollinger uptrend channel and may hover at this level until the policy decision announcement by the European Central Bank later. If the ECB decision is underwhelming, the euro could surge and thus depress the greenback broadly. Speculators have been bearish on the euro for months, expecting the ECB to announce more bond-buying. As such, there is a likelihood that euro-downside has been factored in and profit-taking could commence after the decision is announced. If the euro rallies, USD/SGD could slide back down to the 1.3300 round-figure trading barrier. Dow Jones technical analysis shows immediate support is at 1.3309 (20-day Bollinger mid support), then at 1.3300 (round-figure trading barrier), before 1.3258 (daily Bollinger downtrend channel). Immediate resistance is at 1.3362 (daily Bollinger uptrend channel), then at 1.3400 (round-figure trading barrier), before 1.3415 (top of daily Bollinger uptrend channel).
USD/MYR--uptrend. USD/MYR is likely to keep rising along the daily Bollinger uptrend channel which now supports at 3.5960. There was a pullback on Wednesday, when the U.S. dollar-longs pared positions before the European Central Bank's monetary policy decision, but the persistently low price of crude oil is keeping the ringgit under pressure. Malaysia's ringgit may hit a new 6-year low to the greenback if it surpasses Wednesday's 3.6250--a level not seen since April 2009. Analysts are still broadly bearish on Malaysia's economic outlook due to the oil price collapse--despite the government trying to downplay the effect of oil prices on its economy and current account balance. Dow Jones technical analysis suggests immediate support is at 3.6000 (round-figure trading barrier), then at 3.5950 (base of daily Bollinger uptrend channel), before 3.5800 (psychological support). Immediate resistance is at 3.6380 (top of daily Bollinger uptrend channel), then at 3.6500 (psychological resistance).
USD/THB--downtrend. USD/THB has a bearish technical bias as it sinks lower within the daily Bollinger downtrend channel and below the daily Ichimoku Cloud support zone. The U.S. dollar eased overnight as the euro rallied before the announcement of the European Central Bank's monetary policy decision. The broad consensus that the ECB will announce fresh bond-buying measures may have created a very crowded euro-short market that might snap back on an underwhelming decision by the central bank. The result of which would be a broadly weaker U.S. dollar that could see USD/THB drop to the weekly Ichimoku Cloud support zone at 32.34. Dow Jones technical analysis suggests immediate support is at 32.54 (base of daily Ichimoku Cloud support zone), before 32.34 (weekly Ichimoku Cloud support). Immediate resistance is at 32.64 (daily Ichimoku Cloud resistance zone), then at 32.67 (top of daily Bollinger downtrend channel), before 32.80 (20-day Bollinger mid resistance).
USD/PHP--downtrend. USD/PHP has broken well below the daily Ichimoku Cloud support zone and now targets the 200-day moving average at 44.29. The U.S. dollar fell broadly on Wednesday--and may decline further--as currency punters trimmed their short EUR/USD positions before the European Central Bank monetary policy decision. The likelihood that the market has already priced in the euro-negative effects of the ECB easing program is prompting short-term traders to lock in their profits and buy the euro. A EUR/USD rally Thursday could lead to a crack of the USD/PHP 200-day moving average--a long-term technical barrier--that would suggest more peso strength against the dollar in the weeks ahead. Dow Jones technical analysis suggests immediate support is at 44.29 (200-day moving average), before 44.00 (round-figure trading barrier). Immediate resistance is likely at 44.59 (top of daily Bollinger uptrend channel), then at 44.76 (20-day Bollinger mid resistance and daily Ichimoku Cloud resistance), before 44.84 (top of daily Ichimoku Cloud resistance).
USD/IDR--possible downtrend. USD/IDR could enter the daily Bollinger downtrend channel at 12,450 if the European Central Bank decision disappoints the market - which would send the euro soaring. Expectations are high for the ECB to announce a large bond-buying program. Hints that a 50-billion euro bond-buying program will be announced have already triggered some profit-taking by those who have been short the euro. If the actual size of the bond-buying program--to be announced later today--is less than 50 billion euros, the euro will likely surge much higher and depress the U.S. dollar broadly. A Thursday close below 12,450 would activate the USD/IDR downtrend channel and possibly lead to a break of the daily Ichimoku Cloud support zone at 12,320 in the days ahead. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 12,450 (daily Bollinger downtrend channel), then at 12,320 (base of daily Ichimoku Cloud support zone), before 12,200 (psychological support). Immediate resistance is at 12,500 (psychological resistance), then at 12,550 (20-day Bollinger mid resistance), before 12,650 (daily Bollinger uptrend channel).
USD/INR--downtrend. USD/INR continues its bearish bias inside the daily Bollinger downtrend channel as traders brace for a possible profit-taking spike in EUR/USD after the European Central Bank monetary policy decision due later. If the ECB announces a bond-buying program less than the 50 billion euro per month proposal, EUR/USD will rocket higher and lead to broad U.S. dollar weakness. USD/INR could then easily drop to the 61.19 base of the daily Bollinger downtrend channel. But even if the euro sinks on the announcement of fresh quantitative easing measures, the rupee could still outperform its peers, being one of the favourites among emerging market currencies this year. Dow Jones technical analysis suggests immediate support is at 61.50 (psychological support), then at 61.19 (base of daily Bollinger downtrend channel), before 61.00 (round-figure trading barrier). Immediate resistance is likely at 61.94 (top of daily Bollinger downtrend channel), then at 62.00 (round-figure trading barrier), before
(MORE TO FOLLOW) Dow Jones Newswires
January 21, 2015 20:02 ET (01:02 GMT)
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