(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--possible uptrend. A technical uptrend may return if spot USD/CNY ends Wednesday above 6.2190 and thereby within the daily Bollinger uptrend channel. The likelihood of this happening has increased following an overnight rally in the U.S. dollar index - which should influence the People's Bank of China to set the daily USD/CNY benchmark rate higher. But the recent sharp fall in yield of the U.S. 10-year Treasury note may create mild dollar bearishness that could mitigate dollar strength typically associated with global risk aversion. U.S. stocks fell again overnight, making it less likely that Asian equity markets can recover from the broad selloff seen Tuesday. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2031 (20-day Bollinger mid support), then at 6.2000 (round-figure trading barrier), before 6.1871 (daily Bollinger downtrend channel). Immediate resistance is at 6.2190 (daily Bollinger uptrend channel), then at 6.2350 (top of daily Bollinger uptrend channel), before 6.2500 (psychological resistance).
USD/TWD--uptrend. A bullish chart bias persists for USD/TWD as the Bollinger uptrend channel support moves higher to 31.850 from 31.820 on Tuesday. The U.S. dollar remains buoyant as risk aversion escalated overnight - stocks fell again and investors fled to safe haven assets. Strong buying of U.S. government bonds sent the yield on the benchmark 10-year U.S. government bond tumbling - creating mild downward pressure on the greenback which mitigated dollar strength typically associated with risk aversion. USD/TWD could trigger a long-term bullish technical signal on a January close above the top of the monthly Ichimoku Cloud resistance zone at 31.880. Dow Jones technical analysis suggests immediate support is at 31.850 (base of daily Bollinger uptrend channel), then at 31.610 (20-day Bollinger mid support), before 31.500 (psychological support). Immediate resistance is likely at 32.000 (round-figure trading barrier), then at 32.100 (top of daily Bollinger uptrend channel), before 32.200 (psychological resistance).
USD/KRW--consolidation. USD/KRW may linger around within a 1,095-1,102 range as the conflicting factors of risk aversion and the fall in U.S. government bond yields keep the U.S. dollar in limbo. Generally, risk aversion sends investors away from emerging market currencies and toward the safe haven U.S. dollar, but the depressed yield on the 10-year U.S. Treasury note - due to investors buying more bonds overnight - is a negative factor for the greenback. If USD/KRW ends the day below 1,095, the daily Bollinger downtrend channel would be activated and could encourage short-term USD/KRW selling. Dow Jones technical analysis suggests immediate support is at 1,100 (round-figure trading barrier), then at 1,095 (daily Bollinger downtrend channel), before 1,094 (daily Ichimoku Cloud support). Immediate resistance is at 1,102 (20-day Bollinger mid resistance), then at 1,109 (Bollinger uptrend channel), before 1,110 (round-figure trading barrier).
USD/SGD--uptrend. USD/SGD has a bullish short-term technical bias as long as it stays above 1.3293 and thereby inside the daily Bollinger uptrend channel. The overnight continuation of risk aversion which saw more investors sell stocks for safer investments such as government bonds has led to a broadly stronger U.S. dollar. The greenback is likely to rise in Asia despite the overnight fall in U.S. government bond yields - triggered by safe-haven buying - because the dollar is still the top safe haven asset among regional investors. But the pace of the dollar's rise may weaken now that the yield on the benchmark 10-year U.s. Treasury bond is below 2.00%. Dow Jones technical analysis shows immediate support is at 1.3300 (round-figure trading barrier), then at 1.3293 (base of daily Bollinger uptrend channel), before 1.3209 (round-figure trading barrier). Immediate resistance is at 1.3378 (top of daily Bollinger uptrend channel), then at 1.3400 (round-figure trading barrier), before 1.3418 (top of weekly Bollinger uptrend channel).
USD/MYR--uptrend. USD/MYR likely to keep climbing because of a continued slide in crude oil, which fell below $48/barrel overnight after breaking the psychological barrier of $50/barrel the day before. The impact of falling oil prices on Malaysia's trade balance - due to its oil exports - is a negative for the ringgit. USD/MYR has hit multiyear highs as the ringgit falls, and may now be targeting the 3.6000 round-figure trading barrier - a level last seen in July 2009 and which if breached could trigger more buying of U.S. dollars due to stoploss orders being activated. Unless the Malaysian central bank decides to step in aggressively to stem the fall of the ringgit, USD/MYR rise is unlikely to subside. Traders have seen limited spot market intervention by the Malaysian central bank thus far. Dow Jones technical analysis suggests immediate support is at 3.5500 (psychological support), then at 3.5280 (base of daily Bollinger uptrend channel), before 3.5000 (round-figure trading barrier and 20-day Bollinger mid support). Immediate resistance is at 3.5800 (psychological resistance), then at 3.5830 (top of weekly Bollinger uptrend channel), before 3.6000 (round-figure trading barrier).
USD/THB--consolidation. USD/THB is stuck in a technical no-man's land between the lower and upper Bollinger bands (standard deviation 1). Unless the pair ends Wednesday outside of the 32.84-32.94 range, consolidation may continue in the days ahead. Overnight risk aversion - as seen in U.S. stocks dropping again - is a reason for investors to place their bets on safe haven currencies such as the U.S. dollar and the Japanese yen. But the significant fall in U.S. Treasury yields - also due to investors' flight to safety - has been a mitigating factor for a stronger dollar. Dow Jones technical analysis suggests immediate support is at 32.84 (daily Bollinger downtrend channel), then at 32.79 (base of daily Bollinger downtrend channel), before 32.75 (daily Ichimoku Cloud support). Immediate resistance is at 32.89 (20-day Bollinger mid resistance), then at 32.94 (daily Bollinger uptrend channel), before 33.00 (round-figure trading barrier).
USD/PHP--uptrend. USD/PHP remains bullish within the daily Bollinger uptrend channel but a slight pullback due to lower U.S. government bond yields - which makes the dollar less attractive - may hinder further upside. The greenback needs to close Wednesday above the ceiling of the daily Ichimoku Cloud resistance zone at 44.97 in order to strengthen the current bullish chart signal. The peso has been holding up better than some of its regional peers as the economic outlook for the Philippines remains largely positive - underlined by the credit rating upgrade by Moody's in Dec. 2014. Dow Jones technical analysis suggests immediate support is at 44.83 (base of daily Bollinger uptrend channel), then at 44.80 (psychological support), before 44.70 (20-day Bollinger mid support). Immediate resistance is likely at 44.97 (daily Ichimoku Cloud resistance), then at 45.00 (round-fgure trading barrier) before 45.03 (weekly Bollinger uptrend channel).
USD/IDR--uptrend. USD/IDR is likely to rally higher within the daily Bollinger uptrend channel and may soon reach the 12,970 target that is the top of the monthly Bollinger uptrend channel. Risk aversion has been driving investors away from emerging market currencies such as the rupiah and toward the safe haven U.S. dollar. Another overnight drop in U.S. stocks coupled with the rally of safe haven assets such as gold, government bonds and the Japanese yen has created a foreboding sense that investors expect more financial market distress ahead. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 12,610 (base of daily Bollinger uptrend channel), then at 12,520 (20-day Bollinger mid support), before 12,500 (round-figure trading barrier). Immediate resistance is at 12,710 (top of daily Bollinger uptrend channel), then at 12,970 (top of monthly Bollinger uptrend channel), before 13,000 (round-figure trading barrier).
USD/INR--possible uptrend. The rupee may weaken against the U.S. dollar due to general risk aversion, but may fare better than some of its emerging market currency peers. USD/INR may be boosted by broad U.S. dollar bullishness stemming from escalating financial market jitters that weakened U.S. stocks again overnight. If the daily Bollinger uptrend channel at 63.64 is activated, the rupee is more likely to weaken versus the greenback in the near term. The recent steep fall in oil prices is a positive for India's budget deficit - and thereby the rupee - due to the country's high dependence on imported energy, but the implication of weakening global oil demand may also be worrying. Domestic growth in India could offset a slowdown in the global economy, but it remains questionable how sustainable that effect can be. Dow Jones technical analysis suggests immediate support is at 63.22 (20-day Bollinger mid support), then at 63.00 (round-figure trading barrier), before 62.81 (daily Bollinger downtrend channel). Immediate resistance is likely at 63.64 (daily Bollinger uptrend channel), then at 64.00 (round-figure trading barrier), before 64.05 (top of daily Bollinger uptrend channel).
Write to Ewen Chew at ewen.chew@wsj.com
(MORE TO FOLLOW) Dow Jones Newswires
January 06, 2015 20:40 ET (01:40 GMT)
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Thanks for give comment.