(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. Overnight strength in the benchmark U.S. dollar index ought to influence the People's Bank of China to set the daily USD/CNY benchmark rate higher, which in turn ought to push spot USD/CNY upwards. A surprise interest rate cut by the PBOC on Saturday has alerted the market to potential weakness in the Chinese economy and may be detrimental to yuan sentiment. The official China manufacturing PMI released over the weekend showed improvement but stayed in the sub-50 contractionary zone. Spot USD/CNY could thus rise higher past its October 2012 high as bearishness for the yuan appears. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2581 (base of daily Bollinger uptrend channel), then at 6.2508 (20-day Bollinger mid support), before 6.2500 (round-figure trading barrier). Immediate resistance is at 6.2800 (psychological resistance), then at 6.3000 (round-figure trading barrier).
USD/TWD--rebound. USD/TWD might rebound above the top of the Ichimoku Cloud resistance at 31.560 as the U.S. dollar rises on regional risk aversion stemming from weak China economic data released over the weekend. The fall of EUR/USD past 1.1200 has also generated bullish-USD pressures that ought to drive USD/TWD higher. A Monday close above 31.670 would place USD/TWD above the Cloud resistance and also inside the daily Bollinger uptrend channel, increasing the odds of a sustained rally in the near term. The price of the benchmark 1-month USD/TWD nondeliverable forward contract in the offshore market is hence likely to correct higher from around par against the spot contract price. Dow Jones technical analysis suggests immediate support is at 31.400 (daily Bollinger downtrend channel), then at 31.300 (base of daily Ichimoku Cloud support and base of daily Bollinger downtrend channel). Immediate resistance is likely at 31.540 (20-day Bollinger mid resistance), then at 31.560 (top of daily Ichimoku Cloud resistance), before 31.670 (daily Bollinger uptrend channel).
USD/KRW--consolidation. USD/KRW is heading higher and may enter the daily Bollinger uptrend channel at 1,105 as lead indicator USD/JPY climbs toward 120.00. The catalyst for U.S. dollar strength was a fall in the euro on Friday, as well as risk aversion stemming from China's interest rate cut - on the back of data showing that the manufacturing industry is still contracting, though at a slower pace than last month. A Monday close above 1,105 would increase the chance of a sustained rally toward 1,120 in the near term. Dow Jones technical analysis suggests immediate support is at 1,100 (round-figure trading barrier), then at 1,097 (20-day Bollinger mid support and daily Ichimoku Cloud support), before 1,089 (base of daily Ichimoku Cloud support). Immediate resistance is at 1,105 (daily Bollinger uptrend channel), then at 1,110 (round-figure trading barrier), before 1,112 (top of daily Bollinger uptrend channel).
USD/SGD--uptrend. Overnight U.S. dollar strength arising from EUR/USD weakness and weak Chinese economic data has driven USD/SGD back into the daily Bollinger uptrend channel. The uptrend channel now supports the pair at 1.3604 and could lead the way to 1.3791 where the top of the weekly uptrend channel awaits. China's surprise interest rate cut over the weekend has been read as a negative indicator for risk-taking in Asia - considering that the official manufacturing PMI also showed the economy is still shrinking, albeit less than expected. The Singapore dollar is also under pressure from expectations of monetary policy easing in April when the Monetary Authority of Singapore meets. Dow Jones technical analysis shows immediate support is at 1.3604 (base of daily Bollinger uptrend channel), then at 1.3600 (round-figure trading barrier), before 1.3554 (20-day Bollinger mid support). Immediate resistance is at 1.3654 (top of daily Bollinger uptrend channel), then at 1.3700 (round-figure trading barrier), before 1.3791 (top of weekly Bollinger uptrend channel).
USD/MYR--uptrend. USD/MYR is likely to rally into the daily Bollinger uptrend channel at 3.6240 as risk aversion appears after downbeat Chinese economic data over the weekend coupled with a surprise interest rate cut by the Chinese central bank. The rebound of crude oil prices may help the ringgit deter some weakness but while medium-term forecasts for oil prices remain bearish, the ringgit may still flounder. USD/MYR will take on a bullish chart bias on a Monday close above 3.6240 but positioning remains is still slightly skewed toward long-USD positions and this could result in a slow grind higher. 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 3.5800 (psychological support). Immediate resistance is at 3.6500 (psychological resistance), then at 3.6520 (top of daily Bollinger uptrend channel), before 3.6800 (psychological resistance).
USD/THB--downtrend. USD/THB has been in a downtrend since breaking the 200-day moving average support line - which now caps at 32.46 - but could rebound slightly as risk aversion appears after a surprise interest rate cut by China which suggests the government is wary of further economic weakness ahead. The release of China's official manufacturing data on the weekend seemed to confirm this, as the sector remained in contraction despite improving slightly from the previous month. Thailand's disappointing January trade data released last week has also raised speculation of a Bank of Thailand interest rate cut this month. Dow Jones technical analysis suggests immediate support is at 32.20 (psychological support), then at 32.00 (round-figure trading barrier). Immediate resistance is at 32.46 (200-day moving average and top of daily Bollinger downtrend channel), before 32.55 (20-day Bollinger mid resistance).
USD/PHP--consolidation within downtrend. USD/PHP could rise toward the top of the daily Bollinger downtrend channel as the U.S. dollar rebounds on risk aversion in China after a surprise interest rate cut followed by weak manufacturing data. But if USD/PHP stays below 44.12 the Bollinger downtrend channel will remain in effect. Also keeping a lid on USD/PHP is the important 200-day moving average resistance line at 44.22 which is a longer-term chart barrier. Dow Jones technical analysis suggests immediate support is at 44.02 (base of daily Bollinger downtrend channel), then at 44.00 (round-figure trading barrier), before 43.97 (base of weekly Bollinger downtrend channel). Immediate resistance is likely at 44.12 (top of daily Bollinger downtrend channel), then at 44.22 (200-day moving average resistance), before 44.30 (daily Bollinger uptrend channel).
USD/IDR--uptrend. USD/IDR may rally to a fresh 16.5-year high as risk aversion hits Asia after China cut its base interest rates on the back of data showing another contraction in its manufacturing sector. The rupiah and other risk-sensitive currencies are weaker Monday also due to broader U.S. dollar strength attributed to a sharp drop in the euro. USD/IDR could spike much higher on a break of the 13,000 round-figure trading barrier 13,000 - a level not seen since August 1998. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 12,860 (base of daily Bollinger uptrend channel), then at 12,760 (20-day Bollinger mid support), before 12,670 (daily Bollinger downtrend channel). Immediate resistance is at 12,950 (top of daily Bollinger uptrend channel), then at 13,000 (round-figure trading barrier), before 13,200 (psychological resistance).
USD/INR--consolidation. USD/INR may stabilize slightly higher as market analysts reflect on the Indian budget measures announced over the weekend. Some had expected bigger moves to cut subsidies along with more infrastructure spending. Adding to risk-negative pressures, China's manufacturing data and interest rate cut could create a flight toward safe haven assets as Asia's biggest economic engine appears to be sputtering - enough so that the government has decided to abruptly cut interest rates over the weekend. Dow Jones technical analysis suggests immediate support is at 61.54 (base of daily Bollinger downtrend channel), then at 61.50 (psychological support), before 61.43 (weekly Bollinger downtrend channel). Immediate resistance is likely at 61.77 (top of daily Bollinger downtrend channel), then at 62.00 (round-figure trading barrier and 20-day Bollinger mid resistance), before 62.19 (daily Ichimoku Cloud resistance zone).
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
March 01, 2015 19:30 ET (00:30 GMT)
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0 Response to "USD/Asia Rises as China Rates Cut Stokes Fear -- Asia Daily Forex Outlook"
Thanks for give comment.