(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 may end. Spot USD/CNY could drop out of its Bollinger uptrend channel if the People's Bank of China adjusts the daily USD/CNY benchmark rate lower in line with the U.S. dollar index. Overnight, the greenback fell as the euro and the Australian dollar rebounded sharply on the possibility that the Greek negotiation with the Troika could take much longer than expected. Stocks also rallied, further dampening demand for the safe haven U.S. dollar. If spot USD/CNY ends Wednesday below 6.2460 the bullish chart signal will be extinguished and the pair might retreat further to the 20-day Bollinger mid support at 6.2237. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2460 (base of daily Bollinger uptrend channel), before 6.2237 (20-day Bollinger mid support). Immediate resistance is at 6.2684 (top of daily Bollinger uptrend channel), before 6.2719 (top of monthly Bollinger uptrend channel).
USD/TWD--possible downtrend. USD/TWD could adopt a bearish technical bias after the U.S. dollar sank overnight on a letup in anxiety over Greece. The USD/TWD pair may attempt to break down into the Bollinger downtrend channel at 31.320. A Wednesday close below this mark could trigger more USD short-selling toward the base of the daily Ichimoku Cloud support at 31.090. The price difference between the 1-month USD/TWD nondeliverable forward contract and the spot contract is likely to drop from a premium into a discount as the short-term dollar view flips. Dow Jones technical analysis suggests immediate support is at 31.480 (daily Ichimoku Cloud support), then at 31.320 (daily Bollinger downtrend channel), before 31.090 (base of daily Ichimoku Cloud support). Immediate resistance is likely at 31.580 (20-day Bollinger mid), then at 31.840 (daily Bollinger uptrend channel), before 32.000 (round-figure trading barrier).
USD/KRW--consolidation lower. USD/KRW gaps lower Wednesday to open at 1,093.0 versus its last close of 1,097.4, reflecting the overnight plunge of the U.S. dollar index due to the euro and the Australian dollar rebounding significantly. The daily chart may turn bearish for USD/KRW on a Wednesday close below the daily Ichimoku Cloud support zone at 1,084. Overnight, pressure on the euro - stemming from Greece's renegotiation of its bailout terms - eased as Germany said that the process could take months to pan out. The resulting bounce in the euro, which depressed the U.S. dollar index, has filtered into Asia where the U.S. dollar has fallen sharply across the board. Dow Jones technical analysis suggests immediate support is at 1,090 (round-figure trading barrier), then at 1,087 (20-day Bollinger mid support), before 1,084 (base of daily Ichimoku Cloud support). Immediate resistance is at 1,095 (daily Bollinger uptrend channel), then at 1,098 (top of daily Ichimoku Cloud), before 1,100 (round-figure trading barrier).
USD/SGD--uptrend nullified. USD/SGD has fallen out of the daily Bollinger uptrend channel as the dollar sank overnight against the euro and Australia dollar and risk appetite returned with U.S. stocks rising 1.4%. USD/SGD could make its way to the 20-day Bollinger mid support at 1.3398 next. The catalyst for the overnight change in market sentiment was ostensibly the delay of a resolution in the Greece debt renegotiation process. Additionally, oil prices bounced sharply higher on the possibility that Saudi Arabia might cut production if Russia were to withdraw its support for President Assad in Syria. Data released late Tuesday showed Singapore's manufacturing Purchasing Managers' Index rose to 49.9 in January against 49.6 in December, but remained in the sub-50 contractionary realm. Dow Jones technical analysis shows immediate support is at 1.3400 (round-figure trading barrier), then at 1.3398 (20-day Bollinger mid support), before 1.3314 (daily Bollinger uptrend channel). Immediate resistance is at 1.3481 (daily Bollinger uptrend channel), then at 1.3500 (round-figure trading barrier), before 1.3565 (top of daily Bollinger uptrend channel).
USD/MYR--possible downtrend. USD/MYR reopens after a two-day market closure, and plunges to 3.5690 from its last close of 3.6290, implying a 1.7% appreciation of the ringgit versus the U.S. dollar. If USD/MYR ends the day below 3.5700 the daily Bollinger downtrend channel will be activated and could motivate short-selling of the U.S. dollar by short-term speculative traders. The catalyst for the steep ringgit move was a sharp rebound in crude oil prices over the last two days. Production cuts in other parts of the world prompted bottom-picking in oil prices, while Saudi Arabia entertaining the possibility of cutting oil production if Russia withdraws support in Syria gave a more significant boost. The ringgit is still oil-sensitive despite recent attempts by the Malaysia government to downplay its influence on the local economy. Dow Jones technical analysis suggests immediate support is at 3.5500 (psychological support), then at 3.5440 (base of daily Bollinger downtrend channel). Immediate resistance is at 3.5700 (top of daily Bollinger downtrend channel), then at 3.5950 (20-day Bollinger mid resistance), before 3.6000 (round-figure trading barrier).
USD/THB--consolidation. USD/THB could stabilize on speculation that the Bank of Thailand may be attempting to support the pair to prevent excessive baht strength. A trader said the BOT might be trying to cap the baht at 32.50, avoiding the triggering of stoploss orders past the 200-day moving average line at 32.45. This may be why USD/THB is not lower alongside other regional pairs which sank at Wednesday's open due to overnight U.S. dollar weakness. A resurgence of the euro overnight - on the possibility that Greece renegotiation of its debt obligations could take months - depressed the U.S. dollar index and triggered a reaction in most parts of Asia Wednesday. Dow Jones technical analysis suggests immediate support is at 32.55 (daily Bollinger downtrend channel), then at 32.45 (200-day moving average), before 32.43 (base of daily Bollinger downtrend channel). Immediate resistance is at 32.66 (daily Ichimoku Cloud resistance and 20-day Bollinger mid resistance), before 32.78 (daily Bollinger uptrend channel).
USD/PHP--downtrend. USD/PHP is likely to sink past the 44.00 round-figure trading barrier due to a sharp drop in the U.S. dollar index overnight coupled with a resurgence of risk-taking in stocks. The possible delay of a Greek default on its debt obligations has given the euro a reprieve and prompted capitulation of safe haven risk-off positions. An overnight rebound of the Australian dollar - reversing its the post-RBA rate cut drop - also disrupted bullish-USD sentiment. Besides the current negative fundamentals for the U.S. dollar index, two important USD/PHP chart resistance levels continue to prove resilient, encouraging more bearish bets in USD/PHP. The ceiling of the daily Bollinger downtrend channel at 44.14 as well as the 200-day moving average line at 44.25 managed to fend off bouts of U.S. dollar strength this week. Dow Jones technical analysis suggests immediate support is at 44.00 (round-figure trading barrier and base of weekly Ichimoku Cloud support), then at 43.77 (base of daily Bollinger downtrend channel), before 43.50 (psychological support). Immediate resistance is likely at 44.14 (top of daily Bollinger uptrend channel), then at 44.25 (200-day moving average), before 44.50 (psychological resistance).
USD/IDR--consolidation lower. USD/IDR could fall back into the daily Ichimoku Cloud support zone as the U.S. dollar index slumped overnight due to a sharp bounce of the euro. If USD/IDR ends the day below 12,500 and inside the daily Bollinger downtrend channel, there could be a chance of a further downward move to the Cloud support base at 12,440. The greenback slumped overnight as the euro surged on the likelihood that a Greek renegotiation with the Troika could be protracted, and on analysis that the country has sufficient reserves to pay off its existing debt obligations for several months. U.S. stocks rallied 1.4% as investors trimmed risk-off positions, adding to the positive market sentiment and thus helping emerging market assets. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 12,580 (20-day Bollinger mid support and daily Ichimoku Cloud support), then at 12,500 (daily Bollinger downtrend channel), before 12,440 (base of daily Ichimoku Cloud support). Immediate resistance is at 12,660 (daily Bollinger uptrend channel), then at 12,740 (top of daily Bollinger uptrend channel), before 12,800 (psychological resistance).
(MORE TO FOLLOW) Dow Jones Newswires
February 03, 2015 19:58 ET (00:58 GMT)
USD/INR--possible downtrend. USD/INR could drop into the daily Bollinger downtrend channel - if the Reserve Bank of India decides not to intervene in the currency - as the U.S. dollar slides broadly due to overnight weakness. A Wednesday close below 61.45 would engage the bearish technical channel that might lead to more rupee strength versus the U.S. dollar in the near term. The RBI has said that it has been intervening in the spot market to crimp rupee volatility in recent days. But the broad overnight weakness of the U.S. dollar - due to a strong rebound of the euro as well as the Australian dollar - may persuade the central bank to loosen its reins on the rupee for now. Dow Jones technical analysis suggests immediate support is at 61.45 (daily Bollinger downtrend channel), then at 61.12 (base of daily Bollinger downtrend channel), before 61.00 (round-figure trading barrier) . Immediate resistance is likely at 61.79 (20-day Bollinger mid resistance), then at 62.00 (round-figure trading barrier), before 62.12 (daily Bollinger uptrend channel).
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 03, 2015 19:58 ET (00:58 GMT)
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