(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 has met the top of the Bollinger downtrend channel--a key resistance level--and may now retreat lower. However, overnight U.S. dollar index strength may prompt the People's Bank of China to set the daily USD/CNY benchmark rate higher than Thursday's 6.1375; the daily fixing rate has recently been less influential on spot USD/CNY's direction. The USD/CNY bearish chart bias could be strengthened by a Friday close below the 6.2000 round-figure trading barrier which is also the base of the Ichimoku Cloud support zone. Speculative demand for the yuan is likely to remain strong on expectations of currency liberalization soon, as China seeks to gain IMF approval for the yuan to be part of the Special Drawing Rights currency basket. Adding fuel to yuan-liberalization hopes was news that Australia is considering joining the China-led Asian Infrastructure Investment Bank. 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 6.1927 (base of daily Bollinger downtrend channel), before 6.1800 (psychological support). Immediate resistance is at 6.2193 (top of daily Bollinger downtrend channel), then at 6.2200 (psychological support), before 6.2365 (top of daily Ichimoku Cloud resistance).
USD/TWD--downtrend. USD/TWD may stabilize within the Bollinger downtrend channel as the benchmark U.S. dollar index rebounded overnight. Better-than-expected U.S. initial jobless claims data, coupled with the rise of U.S. Treasury yields, helped to lift the greenback against the major currencies late Thursday. The USD/TWD pair will remain inside the Bollinger downtrend channel as long as it ends Friday below 31.290. The pricing of the benchmark 1-month nondeliverable forward contract versus that of the spot contract remains in discount--a sign of bearish pressure in the offshore market--but may be rising slightly toward par. Dow Jones technical analysis suggests immediate support is at 31.130 (base of daily Bollinger downtrend channel), before 31.000 (round-figure trading barrier). Immediate resistance is likely at 31.290 (top of daily Bollinger downtrend channel), then at 31.450 (20-day Bollinger mid resistance), before 31.470 (daily Ichimoku Cloud resistance).
USD/KRW--consolidation. USD/KRW opens lower than its Thursday close but may climb back up as USD/Asia takes on a supportive tone after the yield on the U.S. 10-year Treasury rose to 2.00% overnight. The daily chart suggests consolidation within a range of 1,100-1,113 is likely in the near term. The dollar was spurred higher after initial jobless claims beat expectations and stocks slid. South Korea's March consumer sentiment index released Thursday slipped to 101 from 103 in February, while consumer inflation expectations fell to 2.5% from 2.6%, suggesting that the domestic economy remains fragile. This could raise hopes that the Bank of Korea will again cut interest rates so as to foster economic growth. Dow Jones technical analysis suggests immediate support is at 1,100 (round-figure trading barrier and entrance of daily Bollinger downtrend channel), then at 1,097 (daily Ichimoku Cloud support), before 1,095 (base of daily Ichimoku Cloud support zone). Immediate resistance is at 1,110 (round-figure trading barrier), then at 1,113 (20-day Bollinger mid resistance), before 1,120 (round-figure trading barrier).
USD/SGD--consolidation higher. USD/SGD may inch upward after the U.S. dollar's overnight rebound against the majors--triggered by the yield on the benchmark 10-year Treasury settling higher near 2.00%. Better-than-expected U.S. initial jobless claims data and a stronger-than-forecast U.S. flash services PMI refreshed expectations the U.S. Federal Reserve might lift interest rates. A dynamic technical base has been established at 1.3671--the entrance of the daily Bollinger downtrend channel. This chart support has held up over the last three days and could motivate more USD-short covering. USD/SGD is also supported on forecasts that Singapore's central bank might ease monetary policy at its April meeting--after a fourth consecutive month of deflation in consumer prices. The form of easing might not be as drastic as re-centering the midpoint of the currency's regulated trading band, which would mean a revaluation, but could be in the form of a band-widening that would allow the Singapore dollar to weaken more than the MAS currently allows. Dow Jones technical analysis shows immediate support is at 1.3700 (round-figure trading barrier), then at 1.3671 (daily Bollinger downtrend channel), before 1.3574 (base of daily Bollinger downtrend channel). Immediate resistance is at 1.3768 (20-day Bollinger mid resistance), then at 1.3800 (round-figure trading barrier), before 1.3865 (daily Bollinger uptrend channel).
USD/MYR--consolidation higher. USD/MYR could take on a mild bullish bias if it ends the day above 3.6760 and thus above the 20-day Bollinger mid resistance line. Though crude oil prices have been rising due to THE escalation of military conflict in the Middle East, which ought to be positive for oil-exporting Malaysia and thereby the ringgit, the overnight rise in yield on the benchmark U.S. 10-year Treasury is propping the dollar up broadly. The higher yield on the U.S. Treasurys implies the market is expecting the U.S. Federal Reserve to raise interest rates, and makes it more expensive for USD-shorts to hold on to their positions. The USD/MYR chart could turn positively bullish if the pair ends Thursday above 3.7040 and thus inside the Bollinger uptrend channel. Dow Jones technical analysis suggests immediate support is at 3.6500 (psychological support), then at 3.6480 (daily Bollinger downtrend channel), before 3.6200 (base of daily Bollinger downtrend channel). Immediate resistance is at 3.6760 (20-day Bollinger mid resistance), then at 3.7000 (round-figure trading barrier), before 3.7040 (daily Bollinger uptrend channel).
USD/THB--consolidation. USD/THB has bottomed out at the 200-day moving average line and may now bob within a range of 32.47-32.63, with a risk toward the topside, following the overnight rise in yield on the U.S. 10-year Treasury note to 2.00%. Risk appetite has been adversely affected by the stronger-than-expected U.S. initial jobless claims data, which hurt U.S. stocks overnight, that serves as a reminder that the U.S. Federal Reserve is likely still on course toward an interest rate hike this year. Although there are a couple of factors still delaying a Fed rate increase in the near future--especially tepid core inflation--U.S. economic data has been mostly improving and could shift the Fed's stance ahead. Dow Jones technical analysis suggests immediate support is at 32.47 (200-day moving average), then at 32.43 (daily Bollinger downtrend channel), before 32.25 (base of daily Bollinger downtrend channel). Immediate resistance is at 32.62 (20-day Bollinger mid resistance), then at 32.63 (daily Ichimoku Cloud resistance), before 32.78 (top of daily Ichimoku Cloud resistance).
USD/PHP--uptrend. USD/PHP keeps its bullish stance after the Philippine central bank held interest rates unchanged Thursday, as expected. The main driving force for now is still the broader direction of the U.S. dollar. Overnight, the greenback was boosted by rising yields on U.S. Treasurys, which were partly triggered by a stronger-than-expected U.S. initial jobless claims report. Bangko Sentral ng Pilippinas maintained the key interest rate at 4.0%, saying that the Philippines economy, unlike others in the region, doesn't need additional monetary support. But BSP also said that inflation is low, allowing room for policy adjustment if needed in the future. Analysts think BSP will adjust rates only when the U.S. Federal Reserve does. Regionally, inflation has been sliding due to dampened energy prices. Dow Jones technical analysis suggests immediate support is at 44.70 (base of daily Bollinger uptrend channel), then at 44.56 (daily Ichimoku Cloud support), before 44.50 (psychological support). Immediate resistance is likely at 44.80 (psychological resistance), then at 44.98 (top of daily Bollinger uptrend channel), before 45.00 (round-figure trading barrier).
USD/IDR--consolidation higher. USD/IDR may rise past the 20-day Bollinger mid resistance line at 13,060--and thereby gain a slightly bullish bias--fuelled by overnight strength of the U.S. dollar index. The greenback was boosted by U.S. initial jobless claims beating forecasts, as well as the U.S. services PMI improving more than expected. The resulting rise in the yield on the benchmark U.S. 10-year Treasury note toward 2.00% also triggered U.S. dollar short covering. Overnight, U.S. stocks fell for a fourth session, likely to cast a pall over regional stocks. Risk aversion in emerging markets tends to boost the safe-haven U.S. dollar. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 13,000 (round-figure trading barrier), then at 12,960 (daily Bollinger downtrend channel), before 12,860 (base of daily Bollinger downtrend channel). Immediate resistance is at 13,060 (20-day Bollinger mid resistance), before 13,160 (daily Bollinger uptrend channel).
(MORE TO FOLLOW) Dow Jones Newswires
March 26, 2015 21:23 ET (01:23 GMT)
USD/INR--uptrend. USD/INR has entered the Bollinger uptrend channel after surging past the ceiling of the daily Ichimoku Cloud consolidation zone on Thursday. The pair has earned a bullish chart bias that could lead it above the round-figure barrier of 63.00 and then to the top of the uptrend channel at 63.11. The positive chart signal for USD/INR, which appeared Thursday is likely to be augmented by broad U.S. dollar strength stemming from better-than-expected U.S. initial jobless claims data released overnight. The data triggered a rise in yield on the benchmark U.S. 10-year Treasury, which gave investors reason to trim U.S. dollar shorts. Dow Jones technical analysis suggests immediate support is at 62.81 (base of daily Bollinger uptrend channel), then at 62.57 (daily Ichimoku Cloud support), before 62.50 (20-day Bollinger mid support). Immediate resistance is likely at 63.00 (round-figure trading barrier), then 63.11 (top of daily Bollinger uptrend channel), before 63.50 (psychological resistance).
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 26, 2015 21:23 ET (01:23 GMT)
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