(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. USD/CNY may drift slightly lower after the benchmark U.S. dollar index slid overnight as bearish-USD bets were piled on before the U.S. Federal Reserve's monetary policy decision later today. The yuan on Tuesday reversed most of its Monday losses to the dollar and is currently in a technical no-man's land between the lower and upper Bollinger bands (standard deviation 1). A daily close below 6.1955 would re-activate the Bollinger downtrend channel that might encourage USD-selling in the near term. This could happen as the daily USD/CNY parity rate is expected to be set lower than Tuesday's 6.1209 due to overnight greenback weakness. The Chinese government's proposed plan to inject liquidity into the banking system via the purchase of local government bonds could in the medium term weaken the currency. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2025 (20-day Bollinger mid support), then at 6.2000 (round-figure trading barrier), before 6.1955 (daily Bollinger downtrend channel). Immediate resistance is at 6.2096 (daily Bollinger uptrend channel), then at 6.2167 (top of daily Bollinger uptrend channel), before 6.2255 (daily Ichimoku Cloud resistance).
USD/TWD--downtrend. USD/TWD remains biased lower, guided by the Bollinger downtrend channel and capped by the 31.000 round-figure trading barrier. The pair may soon attempt to break the weekly Ichimoku Cloud support zone that spans 30.075-30.295. The Taiwan dollar has made consecutive 5-month highs versus the U.S. dollar over the last two sessions as the greenback sinks on dovish expectations of the U.S. Federal Reserve, while sentiment for Taiwan assets has been bullish on hopes for a potential China-Taiwan stock exchange link. The Fed is expected to maintain a dovish tone in its assessment of the U.S. economy and the timing of its first interest rate hike later today, which ought to weigh on the greenback. Dow Jones technical analysis suggests immediate support is at 30.800 (psychological support), then at 30.500 (psychological support), before 30.295 (weekly Ichimoku Cloud support). Immediate resistance is likely at 31.000 (round-figure trading barrier), then at 31.050 (top of daily Bollinger downtrend channel), before 31.200 (psychological resistance and 20-day Bollinger mid resistance).
USD/KRW--pullback within downtrend. The USD/KRW downtrend remains strong but the move may be slightly overdone, the daily chart suggests. USD/KRW gapped lower Wednesday to open at 1,067.0 versus its Tuesday close of 1,070.0, in line with the overnight drop of the U.S. dollar index. But the pair is trading beyond the confines of the lower Bollinger band (standard deviation 2), suggesting that the magnitude of the move has been larger than its recent average, and could therefore snap back. The U.S. dollar has been depressed ahead of the U.S. Federal Reserve's monetary policy decision due later today - the market expects the Fed to remain dovish on the economy and the labor market, implying that its first interest rate rise may be delayed. Dow Jones technical analysis suggests immediate support is at 1,060 (round-figure trading barrier), then at 1,056 (weekly Ichimoku Cloud support zone), before 1,052 (base of weekly Ichimoku Cloud support zone). Immediate resistance is 1,070 (round-figure trading barrier), then at 1,077 (top of daily Bollinger downtrend channel), before 1,080 (round-figure trading barrier).
USD/SGD--downtrend. Widespread bearishness for the U.S. dollar - on market expectations for a dovish tone from the U.S. Federal Reserve at its FOMC meeting today - has led USD/SGD to a third consecutive break of its round-figure trading barriers at 1.3400, 1.3300, and 1.3200 in overnight trade. The U.S. dollar has been falling steadily but may consolidate Wednesday as punters, who have likely already placed their FOMC-bets on the U.S. dollar, sit on the sidelines awaiting today's main market event. If USD/SGD ends this week below 1.3281 it would be inside the weekly Bollinger downtrend channel and thus more likely to keep sliding in the medium-term. Dow Jones technical analysis shows immediate support is at 1.3150 (psychological support), before 1.3100 (round-figure trading barrier). Immediate resistance is at 1.3200 (round-figure trading barrier), then at 1.3250 (psychological resistance), before 1.3282 (top of weekly Bollinger downtrend channel).
USD/MYR--downtrend. USD/MYR may set a 3-month low if it breaches the February low of 3.5380. The U.S. dollar remains pinned by strong selling before the U.S. Federal Reserve monetary policy decision due later today. The overwhelmingly dovish expectations for the Fed stems from recent poorer-than-expected U.S. economic data. The daily USD/MYR chart may trigger a strong bearish technical cue as the momentum indicator line of the Ichimoku Cloud technical analysis could soon drop under the main Cloud. If this signal is confirmed, USD/MYR could fall with greater conviction in the near term. Dow Jones technical analysis suggests immediate support is at 3.5500 (psychological support), then at 3.5380 (February low), before 3.5200 (psychological support). Immediate resistance is at 3.5800 (psychological resistance), then at 3.5880 (top of daily Bollinger downtrend channel), before 3.6000 (round-figure trading barrier).
USD/THB--consolidation. USD/THB has resisted the broader decline of the U.S. dollar index which has dragged its regional peers to multi-month lows in recent days. The baht has been slipping on poor economic data that could lead the Bank of Thailand to announce another interest rate cut at its monetary policy meeting today; the BOT decision is due at 0700 GMT. On Tuesday, trade data from the Commerce Ministry showed exports fell 4.5% on-year in March, prompting the government to lower its 2015 export growth target to 1.2% from an earlier estimate of 4.0%. Elsewhere in Southeast Asia, the U.S. dollar is down due to expectations that the U.S. Federal Reserve will cast a dovish tone at its monetary policy meeting later today. Dow Jones technical analysis suggests immediate support is at 32.57 (base of daily Bollinger uptrend channel), then at 32.50 (200-day moving average support), before 32.48 (20-day Bollinger mid support). Immediate resistance is at 32.64 (daily Ichimoku Cloud resistance), then at 32.66 (top of daily Bollinger uptrend channel), before 32.69 (top of daily Ichimoku Cloud resistance zone).
USD/PHP--downtrend. USD/PHP remains bearish on the daily chart, capped by the ceiling of the daily Bollinger downtrend channel at 44.26. The 200-day moving average line at 44.33 is another technical deterrent that ought to keep USD/PHP depressed. Another overnight drop in the benchmark ICE U.S. dollar index could drag USD/PHP toward 44.07 where the base of the downtrend channel awaits. If the 44.00 round-figure trading barrier is breached, stoploss orders triggered could send the pair significantly lower. The greenback slid again overnight as punters continued to bet that the U.S. Federal Reserve will reiterate a dovish tone at its monetary policy meeting later today. Dow Jones technical analysis suggests immediate support is at 44.07 (base of daily Bollinger downtrend channel), then at 44.00 (round-figure trading barrier), before 43.90 (base of weekly Bollinger downtrend channel). Immediate resistance is likely at 44.26 (top of daily Bollinger downtrend channel), then at 44.33 (200-day moving average), before 44.43 (daily Ichimoku Cloud resistance).
USD/IDR--consolidation. USD/IDR's recent mild rally has abated as the rupiah stabilized after stocks on the benchmark Indonesia index recovered and closed higher on an intraday basis Tuesday - though failing to recoup any of Monday's 3.5% loss. The main driver now could be the upcoming U.S. Federal Reserve monetary policy decision due later today. Though no change in interest rates is expected, the likelihood that the rate-setting committee will reiterate a dovish tone on the economy and job creation has been depressing the greenback. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 12,940 (20-day Bollinger mid support), then at 12,890 (daily Bollinger downtrend channel), before 12,840 (base of daily Bollinger downtrend channel). Immediate resistance is at 12,990 (daily Bollinger uptrend channel), then at 13,000 (round-figure trading barrier), before 13,040 (top of daily Bollinger uptrend channel and top of daily Ichimoku Cloud resistance zone).
(MORE TO FOLLOW) Dow Jones Newswires
April 28, 2015 20:57 ET (00:57 GMT)
USD/INR--uptrend. USD/INR's sharp turnaround over the last two days - due to broad U.S. dollar weakness before the U.S. Federal Reserve's monetary policy decision later today - could threaten the bullish bias on the daily chart. If the pair ends the day below 63.10 the Bollinger uptrend channel will be nullified and the dollar could slide lower toward 62.62 where the 20-day Bollinger mid line awaits. The USD/INR pair has had a bullish tone since the Reserve Bank of India governor last week said additional monetary policy easing is an option as inflation has slowed. Cutting interest rates in India would diminish the high-yield appeal of rupee-denominated assets. Dow Jones technical analysis suggests immediate support is at 63.10 (base of daily Bollinger uptrend channel), then at 63.00 (round-figure trading barrier), before 62.80 (psychological support). Immediate resistance is likely at 63.50 (psychological resistance), then at 63.59 (top of daily Bollinger uptrend channel), before 63.80 (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
April 28, 2015 20:57 ET (00:57 GMT)
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