(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. USD/CNY could inch higher Thursday, the daily technical chart suggests. The Bollinger downtrend channel has been nullified, as suggested Wednesday, due to the recent rise of the benchmark U.S. dollar index. The greenback may creep up toward the 20-day Bollinger mid resistance mark at 6.2195 on an intraday basis. The driver for a stronger greenback may have come from the U.S. Federal Reserve FOMC minutes released overnight. The divided view of the committee members revealed that there is still a possibility the Fed will lift interest rates in June, if not September. The yield on the benchmark U.S. 10-year Treasury note rose a tad past 1.90% from just under it as bond investors reacted to the minutes. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2000 (round-figure trading barrier), then at 6.1950 (daily Bollinger downtrend channel), before 6.1800 (psychological support). Immediate resistance is at 6.2195 (20-day Bollinger mid resistance), then at 6.2220 (daily Ichimoku Cloud resistance), before 6.2440 (daily Bollinger uptrend channel).
USD/TWD--downtrend may end. The USD/TWD downtrend channel may be tested after the U.S. dollar index rose for a third day, helped by the release of the U.S. Federal Reserve FOMC minutes on Wednesday. If USD/TWD ends the day above 31.320 the downtrend channel will be nullified and the pair could rebound to the Ichimoku Cloud resistance zone at 31.490. The revelation that some FOMC members think a June interest rate hike might be appropriate - contingent on economic data improving - may have broadly boosted the greenback. The dollar index also rose due to Greece concerns weighing on the euro; Greece has to fulfil its debt obligations due today, failing which it would be considered in default. The price difference between the 1-month NDF contract versus that of the spot contract has narrowed versus earlier in the week, suggesting that the speculative community is now less bearish on the dollar. Dow Jones technical analysis suggests immediate support is at 31.200 (psychological support), then at 31.160 (base of daily Bollinger downtrend channel), before 31.000 (round-figure trading barrier). Immediate resistance is likely at 31.320 (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 opens Thursday with a bullish tone on the back of a third consecutive rise in the U.S. dollar index. The pair is close to breaking out of the Bollinger downtrend channel, and may also rise past the top of the daily Ichimoku Cloud resistance zone, thus allowing more leeway for the dollar to rally. A Thursday close above the 1,099 top of the Ichimoku Cloud could see USD/KRW rally to the 1,110 Bollinger mid resistance line. The Bank of Korea is scheduled to hold its monetary policy meeting today. The market expects no change in interest rates, since the BOK already cut rates in March. But if the central bank surprises with additional monetary easing, USD/KRW could spike much higher. 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 1,080 (base of daily Bollinger downtrend channel and round-figure trading barrier). Immediate resistance is at 1,095 (top of daily Bollinger downtrend channel), then at 1,099 (top of daily Ichimoku Cloud resistance zone), before 1,100 (round-figure trading barrier).
USD/SGD--possible rebound. USD/SGD may rebound higher if it manages to close Thursday above 1.3584 which would place it above the Ichimoku Cloud consolidation zone and also out of the Bollinger downtrend channel. This signal if confirmed could motivate short-covering of USD/SGD positions. The overnight rise of the U.S. dollar index has so far had little impact on USD/SGD but the bigger push factor for the pair is likely to be expectations of Singapore's central bank easing monetary policy at its April 14 meeting. A consensus is growing that the Monetary Authority of Singapore may 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 1.3550 (psychological support), then at 1.3500 (round-figure trading barrier), before 1.3463 (base of daily Bollinger downtrend channel and bottom of Ichimoku Cloud consolidation zone). Immediate resistance is at 1.3584 (top of daily Bollinger downtrend channel and ceiling of Ichimoku Cloud consolidation zone), then at 1.3600 (round-figure trading barrier), before 1.3650 (psychological resistance).
USD/MYR--downtrend may end. USD/MYR may climb out of the Bollinger downtrend channel on a couple of factors. The overnight rise of the U.S. dollar index - due to the release of the U.S. Federal Reserves' FOMC minutes - and weaker crude oil prices due to the buildup of inventories are factors that suggest USD/MYR will rally Thursday. A daily close above 3.6470 would nullify the Bollinger downtrend channel, which could spur short-covering that might take the pair up to 3.6800 where the 20-day Bollinger mid resistance line awaits. The drop in crude oil prices is negative 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 3.6200 (psychological support), then at 3.6170 (base of daily Bollinger downtrend channel), before 3.6090 (daily Ichimoku Cloud support zone). Immediate resistance is at 3.6470 (top of daily Bollinger downtrend channel), then at 3.6500 (psychological resistance), before 3.6800 (20-day Bollinger mid resistance and psychological resistance).
USD/THB--consolidation higher. USD/THB may rise higher within the daily Ichimoku Cloud consolidation zone if it manages to surpass the immediate chart resistance of 32.59 which is the 20-day Bollinger mid line. The pair is likely to inch higher again due to another overnight rise of the U.S. dollar index - triggered by the release of the U.S. Federal Reserve FOMC minutes which kept alive the possibility of a June interest rate hike - but likely continues to be stuck inside 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 32.44 (daily Bollinger downtrend channel). Immediate resistance is at 32.59 (20-day Bollinger mid resistance), then at 32.67 (top of daily Ichimoku Cloud consolidation zone), before 32.75 (daily Bollinger uptrend channel).
USD/PHP--closed.
USD/IDR--downtrend may end. USD/IDR could lose its bearish technical bias if it closes Thursday above the top of the Bollinger downtrend channel at 12,970 - a seemingly likely outcome after the benchmark U.S. dollar index rallied for a third day. Confirmation that the bearish chart bias has ended could spark a short-covering rally toward the Bollinger uptrend channel at 13,150. The U.S. dollar rose overnight after the release of the U.S. Federal Reserve FOMC minutes which kept alive the possibility of a June interest rate hike. The impending 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 12,880 (base of daily Bollinger downtrend channel), before 12,810 (daily Ichimoku Cloud support zone). Immediate resistance is at 12,970 (top of daily Bollinger downtrend channel), then at 13,000 (round-figure trading barrier), before 13,060 (20-day Bollinger mid resistance).
USD/INR--consolidation higher. USD/INR is still caught in a no-man's land as the pair continues to bob inside the Ichimoku Cloud consolidation zone which spans 62.00-62.52. Overnight U.S. dollar index strength could provide a slight boost to USD/INR but it faces a couple of technical barriers before the path can be cleared for a sustainable rally. A daily close above the 20-day Bollinger mid resistance at 62.40 and the top of the Ichimoku Cloud at 62.52 is needed to trigger a USD/INR rally toward 63.00. The Wednesday release of the U.S. Federal Reserve FOMC minutes - which kept alive the possibility of a June interest rate hike - has boosted the dollar broadly. Conversely, the Reserve Bank of India said Tuesday after its monetary policy meeting that it is ready to lower rates again - a negative for the rupee - if inflation stays down. Dow Jones technical analysis suggests immediate support is at 62.13 (daily Bollinger downtrend channel), then at 62.00 (round-figure trading barrier and base of daily Ichimoku Cloud consolidation zone), before 61.85 (base of daily Bollinger downtrend channel). Immediate resistance is likely at 62.40 (20-day Bollinger mid resistance), then at
(MORE TO FOLLOW) Dow Jones Newswires
62.52 (top of daily Ichimoku Cloud resistance), before 62.68 (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 08, 2015 20:50 ET (00:50 GMT)
April 08, 2015 20:50 ET (00:50 GMT)
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