(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 is likely to consolidate toward the top of its current consolidation range as the U.S. dollar index rallied sharply for a second day, again due to euro weakness. The daily USD/CNY benchmark rate set by the People's Bank of China will hence likely be raised from Tuesday's 6.1098 - implying a weaker yuan. But spot USD/CNY lacks momentum unless it can break out of the consolidation range that spans 6.1989-6.2103. Overnight, the U.S. dollar soared again after the euro slumped on the Eurogroup rejecting again Greece's proposals for fiscal restructuring, while U.S. Treasury yields rose on better-than-expected housing starts data. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2046 (20-day Bollinger mid support), then at 6.2000 (round-figure trading barrier), before 6.1989 (daily Bollinger downtrend channel). Immediate resistance is at 6.2103 (daily Bollinger uptrend channel), then at 6.2138 (daily Ichimoku Cloud resistance zone), before 6.2160 (top of daily Bollinger uptrend channel).
USD/TWD--consolidation within downtrend. The slope of the USD/TWD Bollinger downtrend channel is flattening as the U.S. dollar index made another surge higher overnight. The pair could lose its bearish bias if it ends Wednesday above 30.660 and thus out of the downtrend channel. On Tuesday, the euro tumbled sharply a second day, boosting the U.S. dollar index, on continuing Greece debt default fears after its fiscal restructuring proposal was again rejected by the Eurogroup ministers. The euro could be anchored till the next Greece negotiation meeting in Brussels Thursday. The offshore USD/TWD market has started to turn less bearish on USD/TWD as seen by the smaller price discount between the 1-month contract and that of the spot contract. Dow Jones technical analysis suggests immediate support is at 30.580 (weekly Ichimoku Cloud support and base of weekly Bollinger downtrend channel), then at 30.500 (base of daily Bollinger downtrend channel and psychological support), before 30.290 (base of weekly Ichimoku Cloud support zone). Immediate resistance is likely at 30.660 (top of daily Bollinger downtrend channel), then at 30.820 (20-day Bollinger mid resistance), before 31.000 (round-figure trading barrier and daily Bollinger uptrend channel).
USD/KRW--uptrend. USD/KRW has gapped higher again and is now well inside the daily Bollinger uptrend channel after another overnight surge of the U.S. dollar index - triggered by the euro's second straight tumble on Greece debt default concerns. The USD/KRW pair will take on a bullish chart bias for the near-term if it closes Tuesday above 1,092. From there, the pair may aim for the daily Ichimoku Cloud resistance at 1,102. The safe haven greenback is likely to keep rising after Greece negotiations with Eurogroup ministers fell through again Tuesday; the next meeting scheduled Thursday will see Greece again try to get its fiscal restructuring plan approved so as to unlock eurozone funding for debt repayments. Dow Jones technical analysis suggests immediate support is at 1,092 (base of daily Bollinger uptrend channel), then at 1,090 (round-figure trading barrier), before 1,083 (20-day Bollinger mid support). Immediate resistance is 1,100 (top of daily Bollinger uptrend channel and round-figure trading barrier), then at 1,102 (daily Ichimoku Cloud resistance zone), before 1,107 (top of daily Ichimoku Cloud resistance zone).
USD/SGD--possible uptrend. USD/SGD is making its approach toward the Bollinger uptrend channel after a second consecutive slump of EUR/USD on mounting Greek concerns. The U.S. dollar index shot up overnight to a 2-week high as the euro tumbled, thus sending USD/Asia pairs upwards. If USD/SGD closes Wednesday above 1.3349 it would be inside the daily Bollinger uptrend channel and hence more likely to keep climbing. Greece again failed to get its fiscal restructuring plans approved by the Eurogroup ministers on Tuesday, thus sending another shockwave through EUR/USD. Thursday's upcoming follow-up meeting could again trigger more euro volatility that would likely permeate into Asian currency markets. Overnight, the benchmark U.S. 10-year Treasury yield rose again on stronger-than-expected U.S. housing starts data, thus adding to bullish pressure on the greenback. Dow Jones technical analysis shows immediate support is at 1.3300 (round-figure trading barrier), then at 1.3286 (20-day Bollinger mid support), before 1.3221 (daily Bollinger downtrend channel). Immediate resistance is 1.3349 (daily Bollinger uptrend channel), then at 1.3400 (round-figure trading barrier), before 1.3414 (top of daily Bollinger uptrend channel).
USD/MYR--uptrend channel. USD/MYR may soon rally to 3.6340 as the U.S. dollar index rocketed higher a second day, while crude oil prices subsided ahead of U.S. oil inventory data. The double whammy of a stronger greenback - due to ongoing Greece debt concerns - and weaker oil prices, which affect the ringgit due to Malaysia's significant oil export trade, will make it difficult for USD/MYR to ease off the gas pedal. The pair is now also inside the Bollinger uptrend channel, adding to technical bullish pressure that ought to keep the ringgit weak. Bank of America Merrill Lynch in a research note Tuesday expressed bearishness for Malaysia's economic growth ahead as consumer spending is likely to decline with the implementation of the goods and services tax in April. The investment bank also mentioned growing political risk as support for incumbent prime minister Najib Razak fades. Dow Jones technical analysis suggests immediate support is at 3.6040 (base of daily Bollinger uptrend channel), then at 3.6000 (round-figure trading barrier), before 3.5830 (20-day Bollinger mid support). Immediate resistance is at 3.6340 (daily Ichimoku Cloud resistance), then at 3.6500 (psychological resistance), before 3.6720 (top of daily Ichimoku Cloud resistance).
USD/THB--consolidation higher. Another bout of overnight U.S. dollar index strength ought to lift USD/THB back toward the Bollinger uptrend channel at 33.62. A Wednesday close above this mark would confirm the bullish chart signal and would encourage more U.S. dollar buying. The U.S. dollar index climbed again overnight on growing concerns of a Greek debt default. Meanwhile, the dovish rhetoric of the Thai government on interest rates - attempting to nudge the Bank of Thailand toward another interest rate cut - is another factor that is positive for USD/THB. Thailand's Q1 gross domestic product data published Monday showed a slower-than-expected expansion of 3.0% versus forecasts for 3.4%. Dow Jones technical analysis suggests immediate support is at 33.50 (psychological support), then at 33.22 (20-day Bollinger mid support), before 33.20 (psychological support). Immediate resistance is at 33.62 (daily Bollinger uptrend channel), then at 33.80 (psychological resistance), before 34.00 (round-figure trading barrier and top of daily Bollinger uptrend channel).
USD/PHP--consolidation higher. USD/PHP is likely to climb away from the daily Ichimoku Cloud consolidation zone after another overnight surge of the U.S. dollar index on Greek debt concerns. The USD/PHP Bollinger uptrend channel could be activated if the pair ends the day above 44.66. The euro tumbled overnight after Greek negotiation talks failed again after the country's fiscal restructuring plan was rejected by Eurogroup ministers; the next meeting will be held Thursday. The overnight rise of U.S. Treasury bond yields - due to stronger-than-expected U.S. housing starts data - also played a part in pushing the greenback higher. Dow Jones technical analysis suggests immediate support is at 44.48 (20-day Bollinger mid support), then at 44.44 (base of daily Ichimoku Cloud support), before 44.40 (200-day moving average line). Immediate resistance is likely at 44.53 (top of daily Ichimoku Cloud consolidation zone), then at 44.66 (daily Bollinger uptrend channel), before 44.84 (top of daily Bollinger uptrend channel).
USD/IDR--possible uptrend. USD/IDR could climb back up after having slid out of the daily Bollinger uptrend channel Tuesday after the Indonesia central bank kept interest rates unchanged, as widely expected, while announcing plans to ease certain lending restrictions. The overnight surge of the U.S. dollar index - on a another euro slump and a rise in U.S. Treasury yields - ought to prop USD/IDR up and possibly re-activate the bullish chart signal of the Bollinger uptrend channel. The pair may again be on its way to a 17-year high - the 13,245 peak in March - if it ends Wednesday above 13,130. Bank Indonesia held the base interest rate at 7.5% due to rising inflation and concerns over the currency and current account deficit. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 13,040 (20-day Bollinger mid support), then at 13,020 (daily Ichimoku Cloud support), before 13,000 (round-figure trading barrier). Immediate resistance is at 13,130 (daily Bollinger uptrend channel), then at 13,200 (psychological resistance), then at 13,220 (top of daily Bollinger uptrend channel), before 13,300 (top of weekly Bollinger uptrend channel).
(MORE TO FOLLOW) Dow Jones Newswires
May 19, 2015 21:00 ET (01:00 GMT)
USD/INR--possible uptrend. USD/INR may creep back into the daily Bollinger uptrend channel as the U.S. dollar index surged for a second day following another sharp drop of the euro. If USD/INR closes Wednesday above 63.90 it would be inside the Bollinger uptrend channel and could keep rising toward the 64.18 ceiling of the channel. The ongoing Greek debt default concerns were magnified Tuesday when the Eurogroup ministers rejected another Greek fiscal restructuring plan. A possible resolution could come Thursday at the next meeting between the two sides. Domestic factors could be a stronger driver for the rupee in the weeks ahead as the Reserve Bank of India's June 3 policy meeting approaches; a rate cut may be on the cards due to slowing growth, say some analysts. Dow Jones technical analysis suggests immediate support is at 63.62 (20-day Bollinger mid support), then at 63.34 (daily Bollinger downtrend channel), before 63.00 (round-figure trading barrier). Immediate resistance is likely at 63.90 (daily Bollinger uptrend channel), then at 64.00 (round-figure trading barrier), before 64.18 (top of 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
May 19, 2015 21:00 ET (01:00 GMT)
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