(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 may end. The second consecutive overnight rally of the benchmark U.S. dollar index raises the possibility that the bearish USD/CNY chart signal will be nullified Wednesday. If the pair ends the day above 6.1966 the Bollinger downtrend channel will no longer be in effect and this might prompt short-covering of positions. A relief rally for USD/CNY could take the pair up to the 20-day Bollinger mid resistance line at 6.2224, which is also near the daily Ichimoku Cloud resistance zone. The yuan has recently been on the rise as investor sentiment improves on hopes that currency liberalization is coming soon. China's newly-founded Asian Infrastructure Investment Bank has gained widespread international support, increasing its chances for getting the yuan recognized in the IMF's Special Drawing Rights currency basket. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.1800 (psychological support), then at 6.1707 (base of daily Bollinger downtrend channel), before 6.1753 (weekly Bollinger downtrend channel). Immediate resistance is at 6.1966 (top of daily Bollinger downtrend channel), then at 6.2000 (round-figure trading barrier), before 6.2422 (20-day Bollinger mid resistance and daily Ichimoku Cloud resistance).
USD/TWD--downtrend. The downtrend for USD/TWD likely remains, though the pair could stage a mild relief rally up to the ceiling of the Bollinger downtrend channel at 31.340 due to another wave of USD-buying overnight. The Bollinger downtrend channel if intact by Wednesday's close could guide USD/TWD toward the round-figure trading barrier of 31.000. USD/TWD was hammered to a four-month low when it briefly broke the 31.000 round-figure trading barrier on Tuesday; a trader said it was due to strong selling from custodial banks amid less intervention by the Taiwan central bank to prevent excessive appreciation of the local currency. The price of the one-month NDF contract versus that of the spot contract remains in a deep discount, suggesting that the speculative community is still bearish on the dollar. Dow Jones technical analysis suggests immediate support is at 31.190 (base of daily Bollinger downtrend channel), then at 31.000 (round-figure trading barrier), before 30.800 (psychological support). Immediate resistance is likely at 31.340 (top of daily Bollinger downtrend channel), then at 31.490 (20-day Bollinger mid resistance and daily Ichimoku Cloud resistance), before 31.500 (psychological resistance).
USD/KRW--downtrend may end. USD/KRW gaps higher again, following a second consecutive overnight U.S. dollar rally - possibly triggered by strong U.S. job vacancies data. The bearish technical bias for USD/KRW is about to be threatened as the pair tests the 1,096 ceiling of the Bollinger downtrend channel. A Wednesday close above this mark would nullify the bearish chart signal and could trigger short-covering that might send USD/KRW back up to 1,100 and beyond. The benchmark U.S. 10-year Treasury yield remains near 1.90% after U.S. data published Tuesday showed a larger-than-expected increase in U.S. job openings - though last Friday's jobs report suggests that fewer people are actually seeking work. Dow Jones technical analysis suggests immediate support is at 1,092 (base of daily Ichimoku Cloud support), then at 1,090 (round-figure trading barrier), before 1,082 (base of daily Bollinger downtrend channel). Immediate resistance is at 1,096 (top of daily Ichimoku Cloud resistance zone), then at 1,100 (round-figure trading barrier), before 1,110 (round-figure trading barrier).
USD/SGD--downtrend may end. USD/SGD is pushing through the ceiling of the Bollinger downtrend channel at 1.3589 after the overnight rally of the U.S. dollar index - which has already reversed its post-U.S. nonfarm payrolls losses. A Wednesday close above 1.3589 would nullify the bearish chart signal and may motivate short-covering by speculative traders. The case for a stronger USD/SGD is building as the market looks ahead to the April 14 Monetary Authority of Singapore policy meeting - announced Tuesday. Punters are betting that the MAS will seek to weaken the currency by re-centering the mid-point of the currency trading band. Low growth and deflation over the last four months provide compelling arguments for monetary-policy easing. A big spike in USD/SGD, possibly past the round-figure trading barrier of 1.4000, can be expected if the MAS indeed decides to weaken the Singapore dollar. Dow Jones technical analysis shows immediate support is at 1.3557 (daily Ichimoku Cloud support zone), then at 1.3500 (round-figure trading barrier), before 1.3468 (base of daily Bollinger downtrend channel). Immediate resistance is at 1.3600 (round-figure trading barrier), then at 1.3650 (psychological resistance), before 1.3700 (round-figure trading barrier).
USD/MYR--downtrend. USD/MYR is rising slightly due to overnight greenback strength, but the ringgit is likely to fend off further weakness against the dollar as crude-oil prices rebound higher again. As long as the pair ends Wednesday below 3.6540 the Bollinger downtrend channel will remain in effect and encourage punters to sell USD/MYR. But the rising USD/MYR Ichimoku Cloud support zone - which now provides a technical floor at 3.6090 - may diminish conviction for bearish-USD bets. The rise of crude-oil prices is positive for the ringgit because Malaysia is one of Asia's few oil exporters - oil revenues contribute a significant portion to Malaysia's trade balance and thereby current account balance. Dow Jones technical analysis suggests immediate support is at 3.6260 (base of daily Bollinger downtrend channel), then at 3.6200 (psychological support), before 3.6090 (daily Ichimoku Cloud support zone). Immediate resistance is at 3.6500 (psychological resistance), then at 3.6530 (top of daily Bollinger downtrend channel), before 3.6800 (20-day Bollinger mid resistance and psychological resistance).
USD/THB--consolidation higher. USD/THB has lost its bearish technical bias after Tuesday's closing out of the Bollinger downtrend channel, above the 200-day moving average line, and inside the Ichimoku Cloud resistance zone. The pair is creeping higher again Wednesday due to another overnight rise of the U.S. dollar index - due to upbeat U.S. job openings data - but may consolidate within the Ichimoku Cloud that spans 32.49-32.67. A break of the Cloud's ceiling at 32.67 is needed to unleash more U.S. dollar upside potential. Dow Jones technical analysis suggests immediate support is at 32.49 (base of daily Ichimoku Cloud consolidation zone), then at 32.47 (200-day moving average), before 32.45 (daily Bollinger downtrend channel). Immediate resistance is at 32.61 (20-day Bollinger mid resistance), then at 32.67 (top of daily Ichimoku Cloud consolidation zone), before 32.77 (daily Bollinger uptrend channel).
USD/PHP--possible rebound higher. USD/PHP may breach the top of the daily Ichimoku Cloud consolidation zone after another overnight rise of the benchmark U.S. dollar index. A Wednesday close above 44.57 would place USD/PHP above the 20-day Bollinger mid resistance and out of the Ichimoku Cloud consolidation zone, thus giving the pair more leeway to keep rising in the short term. USD/PHP could then make a run for the Bollinger uptrend channel that begins at 44.78. U.S. job openings data were stronger than expected Tuesday - mitigating the weak nonfarm payrolls data last Friday - thus refreshing expectations that the U.S. Federal Reserve might still consider a sooner-than-expected interest-rate increase. Dow Jones technical analysis suggests immediate support is at 44.36 (entrance of daily Bollinger downtrend channel), then at 44.29 (200-day moving average line), before 44.20 (base of daily Ichimoku Cloud support). Immediate resistance is likely at 44.50 (psychological support), then at 44.57 (20-day Bollinger mid resistance and top of daily Ichimoku Cloud), before 44.78 (daily Bollinger uptrend channel).
USD/IDR--downtrend may end. USD/IDR could lose its bearish technical bias if it ends the day above 12,980 - a seemingly likely outcome as the U.S. dollar jumps in Asia Wednesday following overnight strength against the major currencies. A close above 12,980 would nullify the Bollinger downtrend channel and could spark a short-covering rally toward the 20-day Bollinger mid resistance at 13,070. The driver for U.S. dollar strength may have been the stronger-than-expected U.S. job openings report released Tuesday. The upbeat data mitigates the poor U.S. nonfarm payrolls data released Friday, sustaining hopes that the U.S. Federal Reserve will lift interest rates this year - which is a positive for the U.S. dollar. The rise of U.S. interest rates dampens demand for the carry trade which entails borrowing U.S. dollars to buy higher-yielding emerging-market currencies such as the Indonesia rupiah. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 12,890 (base of daily Bollinger downtrend channel), then at 12,810 (daily Ichimoku Cloud support zone). Immediate resistance is at 12,980 (top of daily Bollinger downtrend channel), then at 13,000 (round-figure trading barrier), before 13,070 (20-day Bollinger mid resistance).
(MORE TO FOLLOW) Dow Jones Newswires
April 07, 2015 21:12 ET (01:12 GMT)
USD/INR--consolidation higher. USD/INR is likely to build on its rally this week and may test the top of the daily Ichimoku Cloud consolidation zone at 62.52. If this chart resistance breaks, the pair may rally higher in short course. The catalyst for the dollar's Wednesday rise in Asia was likely the stronger-than-expected U.S. job openings data released Tuesday. The data suggest that the U.S. labor market is indeed improving, even though data last Friday showed that fewer people actually landed jobs. On Tuesday, the Reserve Bank of India kept interest rates steady as expected, having cut interest rates twice this year; the decision had little impact on the rupee. The RBI said that it is ready to lower rates again if inflation stays down. Dow Jones technical analysis suggests immediate support is at 62.16 (daily Bollinger downtrend channel), then at 62.00 (round-figure trading barrier), before 61.94 (base of daily Ichimoku Cloud consolidation zone). Immediate resistance is likely at 62.43 (20-day Bollinger mid resistance), then at 62.52 (top of daily Ichimoku Cloud resistance), before 62.70 (daily Bollinger uptrend channel).
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
April 07, 2015 21:12 ET (01:12 GMT)
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