(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 may linger near its 8-month high as the U.S. dollar index stabilized overnight, making it likely that the People's Bank of China will keep the daily USD/CNY benchmark rate close to Monday's 6.1385. The yuan has been falling versus the U.S. dollar this year, mainly due to broad U.S. dollar strength but should not be cause for worry, said authorities on Monday. Analysts have suggested that the government will not flinch if the yuan depreciates 2%-3% for 2015. Signs of slowdown in China's manufacturing sector took the Shanghai equity index down on Monday and may continue to weigh on stocks Tuesday; overnight, U.S. manufacturing data added to concerns that global production indices are slipping. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2424 (base of daily Bollinger uptrend channel), before 6.2214 (20-day Bollinger mid support). Immediate resistance is at 6.2634 (top of daily Bollinger uptrend channel), before 6.2719 (top of monthly Bollinger uptrend channel).
USD/TWD--consolidation. USD/TWD may consolidate just above the 20-day Bollinger mid resistance as the daily chart indicates a lack of momentum. The dollar, which closed at 31.555 on Monday, is supported by the daily Ichimoku Cloud support zone at 31.480 but may struggle to rise above 31.840 where the daily Bollinger uptrend channel begins. The price difference between the 1-month USD/TWD nondeliverable forward contract and the spot contract has turned more positive, suggesting that dollar bullishness is increasing. Dow Jones technical analysis suggests immediate support is at 31.480 (daily Ichimoku Cloud support), before 31.330 (daily Bollinger downtrend channel). Immediate resistance is likely at 31.630 (20-day Bollinger mid), then at 31.840 (daily Bollinger uptrend channel), before 32.000 (round-figure trading barrier).
USD/KRW--uptrend. USD/KRW will maintain a bullish technical bias if it stays above 1,098 by Tuesday's close. The daily Ichimoku Cloud support at 1,098 and the base of the daily Bollinger uptrend channel at 1,095 should keep the dollar propped up on an intraday basis. Speculation that the Bank of Korea might be the next Asian central bank to cut interest rates has been one of the factors pushing USD/KRW upwards over the last few days. But the HSBC South Korea manufacturing PMI released early Monday showed that the sector expanded, raising the index to 51.1 in January versus 49.9 in December, which could temper some rate-cut expectations. Dow Jones technical analysis suggests immediate support is at 1,098 (daily Ichimoku Cloud support), then at 1,095 (base of daily Bollinger uptrend channel), before 1,090 (round-figure trading barrier). Immediate resistance is at 1,100 (round-figure trading barrier), then at 1,103 (top of daily Bollinger uptrend channel), before 1,110 (round-figure trading barrier).
USD/SGD--uptrend. USD/SGD may slip toward the base of the 1.3482 base of the daily Bollinger uptrend channel as risk appetite recovers slightly on the back of Wall Street's rally overnight. But if the 1.3482 support holds firm by Tuesday's close, the bullish chart bias for USD/SGD will remain, suggesting that the Singapore dollar is more likely to weaken in the near term versus the U.S. dollar. Singapore's manufacturing Purchasing Managers' Index will be published at 1330 GMT, shedding light on the nation-state's factory sector which could see a slowdown along with China and the U.S.. Dow Jones technical analysis shows immediate support is at 1.3500 (round-figure trading barrier), then at 1.3482 (base of daily Bollinger uptrend channel), before 1.3400 (round-figure trading barrier). Immediate resistance is at 1.3569 (top of daily Bollinger uptrend channel), then at 1.3600 (round-figure trading barrier), before 1.3602 (top of weekly Bollinger uptrend channel).
USD/MYR--closed.
USD/THB--consolidation. USD/THB may linger in a narrow range of 32.55-32.64, supported by the entrance to the daily Bollinger downtrend channel and capped by the daily Ichimoku Cloud resistance zone. A sharp USD/THB selloff seen on Monday - which a trader said was likely due to capitulation of long-USD positions placed last week before the Bank of Thailand meeting - may dissuade upside attempts for now. The U.S. dollar index was stable overnight while stocks on Wall Street rose, which could help Asia stocks and currencies gain slightly Tuesday. Dow Jones technical analysis suggests immediate support is at 32.55 (daily Bollinger downtrend channel), then at 32.49 (weekly Bollinger downtrend channel), before 32.43 (base of daily Bollinger downtrend channel). Immediate resistance is at 32.64 (daily Ichimoku Cloud resistance), then at 32.67 (20-day Bollinger mid resistance), before 32.80 (daily Bollinger uptrend channel).
USD/PHP--downtrend. USD/PHP may test the downside Tuesday after two important chart resistance levels proved to be resilient. The ceiling of the daily Bollinger downtrend channel at 44.18 as well as the 200-day moving average line at 44.25 managed to fend off a bout of U.S. dollar strength Monday, and may depress USD/PHP toward the base of the daily Bollinger downtrend channel at 43.81 in the days ahead. Risk appetite could make a tentative return as U.S. stocks rallied overnight, lifting the somber mood brought on by weak global manufacturing data. Dow Jones technical analysis suggests immediate support is at 44.00 (round-figure trading barrier and base of weekly Ichimoku Cloud support), then at 43.81 (base of daily Bollinger downtrend channel), before 43.50 (psychological support). Immediate resistance is likely at 44.18 (top of daily Bollinger uptrend channel), then at 44.25 (200-day moving average), before 44.50 (psychological resistance).
USD/IDR--uptrend. USD/IDR may slip to the 12,660 bottom of the daily Bollinger uptrend channel and then consolidate. If this chart support holds by Tuesday's close, there might be a return of dollar strength in the near term. Although the yield on the benchmark U.S. 10-year Treasury note remains low, making it less appealing to hold the greenback, the nascent risk aversion surrounding the Greek attempt to renegotiate the terms of its bailout has been keeping the safe haven U.S. dollar propped up. Meanwhile, the rupiah has lost some of its shine as Indonesia investors turn slightly cautious due to recent political developments. Approval ratings for President Joko Widodo have fallen after the Indonesia anti-corruption agency named as a suspect the 3-star police general whom Mr. Widodo nominated for the role of police chief. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 12,660 (base of daily Bollinger uptrend channel), then at 12,580 (20-day Bollinger mid support and daily Ichimoku Cloud support). Immediate resistance is at 12,740 (top of daily Bollinger uptrend channel), then at 12,800 (psychological resistance), before 13,000 (round-figure trading barrier).
USD/INR--consolidation lower. USD/INR may consolidate lower toward the entrance of the daily Bollinger uptrend channel at 61.43 after having failed to break the 20-day Bollinger mid resistance on Monday - a sign of low momentum. USD/INR may range within a band of 61.43-61.88 until the Reserve Bank of India's monetary policy statement scheduled at 0530 GMT. Investors will be looking for hints of an interest rate cut - as inflation has been slipping - which would boost stocks and increase speculative demand for the rupee. Monday's drop in India's manufacturing PMI - at 52.9 for January versus 54.5 in December - may have boosted hopes for a growth-stimulating interest rate cut. Dow Jones technical analysis suggests immediate support is at 61.43 (daily Bollinger downtrend channel), then at 61.00 (round-figure trading barrier), before 60.97 (base of daily Bollinger downtrend channel). Immediate resistance is likely at 61.88 (20-day Bollinger mid resistance), then at 62.00 (round-figure trading barrier), before 62.40 (daily Ichimoku Cloud resistance).
Write to Ewen Chew at ewen.chew@wsj.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
February 02, 2015 19:51 ET (00:51 GMT)
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