(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--downtrend. USD/CNY may slide for a second day as the bearish Bollinger downtrend channel was kept in play by Monday's lower closing. The dynamic ceiling of the downtrend channel now caps the pair at 6.2131 versus Monday's previous resistance level of 6.2165. The bearish technical bias could be mitigated by a possibly higher USD/CNY daily parity rate - due to an overnight rise in the U.S. dollar index. That said, the correlation between the daily USD/CNY benchmark rate and spot USD/CNY has been weakening. Speculative yuan demand could be on the rise as Russia, Australia and the Netherlands agreed to join the China-led Asian Infrastructure Investment Bank over the weekend, joining others such as the U.K., Italy, and France. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2000 (round-figure trading barrier and base of daily Ichimoku Cloud support), then at 6.1862 (base of daily Bollinger downtrend channel), before 6.1800 (psychological support). Immediate resistance is at 6.2131 (top of daily Bollinger downtrend channel), then at 6.2200 (psychological support), before 6.2354 (top of daily Ichimoku Cloud resistance).
USD/TWD--downtrend. USD/TWD has been slipping in whipsaw fashion over the last two weeks and is likely to continue doing so. The offshore market has been bearish on the U.S. dollar for the last few sessions, with the price of the 1-month nondeliverable forward contract trading below that of the spot contract. The daily Bollinger downtrend channel now caps USD/TWD at around 31.420 and is aiming toward the 31.000 round-figure trading barrier. Overnight, the ICE U.S. dollar index gained, mainly due to the Japanese yen falling, which could lend support to USD/TWD. But if the yield on the benchmark U.S. 10-year Treasury still remains below 2.00%, the greenback may struggle to rally much. Dow Jones technical analysis suggests immediate support is at 31.310 (base of daily Bollinger downtrend channel), then at 31.200 (psychological support), before 31.000 (round-figure trading barrier). Immediate resistance is likely at 31.420 (top of daily Bollinger downtrend channel), then at 31.530 (20-day Bollinger mid resistance and daily Ichimoku Cloud resistance).
USD/KRW--consolidation higher. USD/KRW opened higher Tuesday on the back of USD/JPY's overnight rally, but is still stuck in a consolidation zone which now spans 1,102-1,115. If USD/KRW ends the day above 1,115 the break of the 20-day Bollinger mid resistance may trigger mild short-covering. USD/JPY is attempting to break its own Bollinger mid resistance line, which might also trigger a move in USD/KRW. The South Korea won typically has a correlation to the Japanese yen due to the South Korean central bank's stance toward ensuring that the won stays relatively cheaper than the yen - for export competitiveness. The U.S. dollar may struggle to sustain its gains though, unless the yield on the benchmark U.S. 10-year Treasury yield crosses above 2.00%. Dow Jones technical analysis suggests immediate support is at 1,102 (daily Bollinger downtrend channel), then at 1,100 (round-figure trading barrier), before 1,097 (daily Ichimoku Cloud support). Immediate resistance is at 1,110 (round-figure trading barrier), then at 1,115 (20-day Bollinger mid resistance), before 1,120 (round-figure trading barrier).
USD/SGD--consolidation higher. USD/SGD may be eyeing a break of the 20-day Bollinger mid resistance line at 1.3780 as regional lead indicator USD/JPY rallies past the round-figure trading barrier of 120.00. The overnight rise of the U.S. dollar index is pulling most USD/Asia pairs higher, despite the risk-on moves in U.S. equities overnight. Wall Street rose 1.2% on positive consumer spending and strong pending home sales data - which may help to buoy Singapore stocks Tuesday. But even if risk appetite picks up, USD/SGD is likely to remain supported due to expectations that Singapore's central bank might ease monetary policy at its April meeting - likely in the second week of April - after a fourth consecutive month of deflation in consumer prices. Dow Jones technical analysis shows immediate support is at 1.3700 (round-figure trading barrier), then at 1.3693 (daily Bollinger downtrend channel), before 1.3606 (base of daily Bollinger downtrend channel). Immediate resistance is at 1.3780 (20-day Bollinger mid resistance), then at 1.3800 (round-figure trading barrier), before 1.3867 (daily Bollinger uptrend channel).
USD/MYR--uptrend. USD/MYR has crossed into the daily Bollinger uptrend channel as of its Monday close, and is now back on a trajectory toward the major round-figure trading barrier of 3.8000 - the level at which the Malaysia ringgit was pegged to the U.S. dollar in 2005. The overnight rally of the benchmark U.S. dollar index ought to augment the bullish chart signal that has appeared on the daily USD/MYR chart. However, the subdued nature of the yield on the U.S. 10-year Treasury note may mitigate bullish-USD sentiment. Unless the 10-year yield manages to rise above 2.00% again, U.S. dollar strength may be fleeting. Dow Jones technical analysis suggests immediate support is at 3.7100 (base of daily Bollinger uptrend channel), then at 3.7000 (round-figure trading barrier), before 3.6880 (20-day Bollinger mid support). Immediate resistance is at 3.7350 (top of daily Bollinger uptrend channel), then at 3.7500 (psychological resistance), before 3.7700 (top of weekly Bollinger uptrend channel).
USD/THB--consolidation higher. USD/THB is likely to rise toward the topside of its consolidation range of 32.47-32.62 as a bullish-USD bias emerges after Monday's overnight volatility against the major currencies. If the pair ends the day above 32.69 it would be above the 20-day Bollinger mid resistance line, and inside an elevated consolidation range of 32.62-32.78 demarcated by the Ichimoku Cloud resistance zone. USD/THB would need a stronger catalyst - such as a rise in the U.S. 10-year Treasury yield above 2.00% - in order to gain enough bullish momentum to break above the Cloud resistance zone. Thailand's February industrial production data released Monday showed its first rise in nearly two years - due to higher car manufacturing volumes - which may have helped the baht gain slightly versus the U.S. dollar on Monday. Dow Jones technical analysis suggests immediate support is at 32.47 (200-day moving average and daily Bollinger downtrend channel), before 32.32 (base of daily Bollinger downtrend channel). Immediate resistance is at 32.62 (daily Ichimoku Cloud resistance), then at 32.69 (20-day Bollinger mid resistance), before 32.78 (top of daily Ichimoku Cloud resistance).
USD/PHP--uptrend. USD/PHP is likely to rally away from the 44.76 base of its Bollinger uptrend channel and thus keep the bullish chart signal in effect. The overnight rise of the U.S. dollar index - due to USD/JPY climbing past 120.00 - is lifting most USD/Asia pairs Tuesday. USD/PHP is likely to continue being driven by external factors such as U.S. data ahead, as the market brushes off forecasts for an interest rate cut by the Philippine central bank. Last week, Bangko Sentral ng Pilippinas maintained the key interest rate at 4.0% and said the economy doesn't need monetary stimulus; but it added that low inflation provides room for policy adjustment if needed. Analysts think BSP will adjust rates only when the U.S. Federal Reserve does. Dow Jones technical analysis suggests immediate support is at 44.76 (base of daily Bollinger uptrend channel), then at 44.56 (daily Ichimoku Cloud support), before 44.50 (psychological support). Immediate resistance is likely at 45.00 (round-figure trading barrier), before 45.04 (top of daily Bollinger uptrend channel).
USD/IDR--consolidation higher. Overnight U.S. dollar index strength may lead USD/IDR past the 20-day Bollinger mid resistance line at 13,060 - which has been holding the pair back for the last two days. A clear break of this line could unleash USD/IDR for a rally to 13,160 where the Bollinger uptrend channel begins. The greenback rose overnight after positive U.S. personal income and pending home sales data - which may have helped Wall Street to rally 1.2%. But for a sustained dollar rally, the yield on the benchmark U.S. 10-year Treasury note needs to cross above 2.00% - below which it implies muted expectations of a rate hike by the U.S. Federal Reserve in the near future. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 13,000 (round-figure trading barrier), then at 12,980 (daily Bollinger downtrend channel), before 12,880 (base of daily Bollinger downtrend channel). Immediate resistance is at 13,070 (20-day Bollinger mid resistance), then at 13,160 (daily Bollinger uptrend channel), before 13,200 (psychological resistance).
(MORE TO FOLLOW) Dow Jones Newswires
March 30, 2015 21:06 ET (01:06 GMT)
USD/INR--consolidation higher. USD/INR could take a cue from other USD/Asia pairs that start trading earlier and thus rally Tuesday. A daily close above 62.76 would confirm a bullish technical bias that could lead USD/INR toward 63.00 within days. The pair is currently stuck near the 62.56 top of the daily Ichimoku Cloud resistance zone - where the 20-day Bollinger mid resistance line also acts as a technical cap. A break of this dual resistance mark is needed to allow USD/INR to attempt entry into the Bollinger uptrend channel at 62.76. The greenback rose overnight after a big jump in U.S. pending home sales, but the depressed yield on the benchmark U.S. 10-year Treasury may continue to thwart a sustained U.S. dollar rally. Dow Jones technical analysis suggests immediate support is at 62.50 (psychological support), before 62.35 (daily Bollinger downtrend channel). Immediate resistance is likely at 62.57 (daily Ichimoku Cloud resistance and 20-day Bollinger mid line), then at 62.76 (daily Bollinger uptrend channel), before 63.00 (round-figure trading barrier).
Write to Ewen Chew at ewen.chew@dowjones.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
March 30, 2015 21:06 ET (01:06 GMT)
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