(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 higher. Spot USD/CNY may gravitate higher within its current narrow range of 6.2358-6.2556 as the U.S. dollar index inched upwards overnight on a continued rise in U.S. Treasury yields above 2.00%. USD/CNY could take on a bullish chart bias if it ends the day above this suggested range - which would place it inside the Bollinger uptrend channel. Chinese stocks have recently been building momentum as more analysts tout the possibility of further monetary policy-easing by the central bank. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2358 (20-day Bollinger mid support), then at 6.2160 (daily Bollinger downtrend channel), then at 6.2000 (round-figure trading barrier and daily Ichimoku Cloud support). Immediate resistance is at 6.2556 (daily Bollinger uptrend channel), then at 6.2754 (top of daily Bollinger uptrend channel), before 6.2800 (psychological resistance).
USD/TWD--consolidation. USD/TWD may continue to meander inside the daily Ichimoku Cloud support zone while technical cues and fundamental leads are few. The onshore USD/TWD market has been less reactive to external factors - though the offshore-based nondeliverable forwards market has been pricing in a stronger U.S. dollar over the last few days. The main driver for broad U.S. dollar strength has been rising yields on U.S. government bonds and the uncertainty over Greece's negotiation with the Troika over its debt obligations which has been sending investors to the safe haven greenback. The rising price difference between the 1-month USD/TWD non-deliverable forward contract and the spot contract indicates that short-term offshore traders are buying the dollar more aggressively than last week. Dow Jones technical analysis suggests immediate support is at 31.470 (20-day Bollinger mid support), then at 31.310 (daily Bollinger downtrend channel), before 31.160 (base of daily Ichimoku Cloud support). Immediate resistance is likely at 31.640 (daily Bollinger uptrend channel), then at 31.660 (top of daily Ichimoku Cloud resistance), before 31.800 (top of daily Bollinger uptrend channel).
USD/KRW--uptrend. USD/KRW gapped significantly higher at its Thursday open after a sharp overnight rally in USD/JPY. The won typically tracks the yen due to the perceived importance of relative currency value for export competitiveness. The U.S. dollar is more likely to keep climbing versus the South Korean won now that it has surpassed the top of the Ichimoku Cloud resistance zone and also crossed the round-figure trading barrier of 1,100. The next target for the pair is the 1,110 round-figure trading barrier. Dow Jones technical analysis suggests immediate support is at 1,102 (daily Ichimoku Cloud support), then at 1,100 (round-figure trading barrier), before 1,096 (base of daily Bollinger uptrend channel). Immediate resistance is at 1,107 (weekly Bollinger uptrend channel), then at 1,110 (round-figure trading barrier), before 1,120 (round-figure trading barrier).
USD/SGD--uptrend. USD/SGD is likely to keep rising now that it has broken through the 1.3600 round-figure trading barrier. The greenback is broadly stronger as yields on safe haven U.S. government bonds rise above 2.00%. Overnight USD/JPY strength also appeared to have an influence on USD/SGD as the former spiked well past 120.00. The risk of Greece negotiation talks - which resume Monday - leading to more uncertainty for European markets has had investors flocking to the safe haven U.S. dollar. Dow Jones technical analysis shows immediate support is at 1.3600 (round-figure trading barrier), then at 1.3553 (base of daily Bollinger uptrend channel), before 1.3500 (round-figure trading barrier). Immediate resistance is at 1.3644 (top of daily Bollinger uptrend channel), then at 1.3700 (round-figure trading barrier).
USD/MYR--possible uptrend. USD/MYR is rising for a fourth day as oil prices slipped lower following a report showing that U.S. oil inventories reached a record high. The influence of oil prices on the ringgit is unlikely to diminish despite data showing that Malaysia for the first time became a marginal net oil importer in 2014. The market is awaiting the 0401 GMT release of Malaysia's fourth quarter Gross Domestic Product data; analysts are expecting growth of 5.0% versus 5.6% in the previous quarter. Dow Jones technical analysis suggests immediate support is at 3.6000 (round-figure trading barrier), then at 3.5960 (20-day Bollinger mid support), before 3.5680 (daily Bollinger downtrend channel). Immediate resistance is at 3.6240 (daily Bollinger uptrend channel), then at 3.6510 (top of daily Bollinger uptrend channel).
USD/THB--consolidation higher. USD/THB may stabilize or inch higher as the U.S. dollar index gained slightly overnight. Entry into the daily Bollinger uptrend channel at 32.67 might increase bullish potential slightly but a stronger technical resistance at 32.73 - the daily Ichimoku Cloud resistance - might douse the dollar's rally. The overnight rise of USD/JPY is creating a mild proxy effect on USD/THB and other regional currency pairs. Fundamentally, the recent rise in yields on U.S. government bonds may be prompting USD-short covering. Dow Jones technical analysis suggests immediate support is at 32.61 (20-day Bollinger mid support), then at 32.55 (daily Bollinger downtrend channel), before 32.49 (base of daily Bollinger downtrend channel). Immediate resistance is at 32.67 (daily Bollinger uptrend channel), then at 32.73 (daily Ichimoku Cloud resistance and top of daily Bollinger uptrend channel).
USD/PHP--consolidation higher. USD/PHP may attempt to enter the daily Bollinger uptrend channel at 44.50 as the U.S. dollar index made small gains overnight. A Thursday close above 44.50 would confirm a bullish bias for USD/PHP and increase the likelihood of a sustained rally to 44.80. With the benchmark U.S. 10-year Treasury yield hovering above 2.00%, USD-shorts are likely getting nervous and trimming their positions. The possibility of failed negotiations between Greece and the Troika may also be a factor prompting investors to reduce bets on risky assets. The Philippine central bank is likely to stand firm on monetary policy at its meeting today. Dow Jones technical analysis suggests immediate support is at 44.29 (20-day Bollinger mid support), then at 44.23 (200-day moving average), before 44.06 (daily Bollinger downtrend channel). Immediate resistance is likely at 44.50 (psychological resistance and daily Bollinger uptrend channel), before 44.73 (top of daily Bollinger uptrend channel), before 44.80 (daily Ichimoku Cloud resistance zone).
USD/IDR--uptrend. USD/IDR may rally to 12,800 in the days ahead as the arc of the daily Bollinger uptrend channel steepens with the pair's third consecutive rally. Overnight U.S. dollar index strength has lifted most USD/Asia pairs, while a mild sense of risk aversion due to Greece's negotiations with the eurozone leaders drags on into Monday after a false glimmer of a quick resolution on Wednesday. U.S. dollar strength remains an underlying theme as yields on benchmark U.S. Treasury notes continue to firm up with 10-year yield rising above 2.00%. 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), before 12,550 (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--uptrend may stall. USD/INR continues to climb within the daily Bollinger uptrend channel but may stall as the daily Ichimoku Cloud resistance zone looms closer. The Cloud currently caps at 62.51 - not far away from Wednesday's close of 62.43. The rupee has been slipping in the aftermath of the ruling BJP party's loss in the Delhi election - the first state election conceded since the BJP won general elections in 2014. In the background, risk aversion in Europe and rising U.S. Treasury yields continue to support the safe haven U.S. dollar. Dow Jones technical analysis suggests immediate support is at 62.11 (base of daily Bollinger uptrend channel), then at 62.00 (round-figure trading barrier), before 61.79 (20-day Bollinger mid support). Immediate resistance is likely at 62.43 (top of daily Bollinger uptrend channel), then at 62.51 (daily Ichimoku Cloud resistance zone), before 62.69 (weekly 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 11, 2015 19:53 ET (00:53 GMT)
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