(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 could range slightly lower between 6.2044-6.2083 after it fell out of the daily Bollinger uptrend channel on Tuesday - implying a stronger yuan versus the U.S. dollar. If USD/CNY closes Wednesday below 6.2005 it would be inside the Bollinger downtrend channel, suggesting that the yuan may keep rising in the near term. The currency gained Tuesday as stocks in Shanghai reversed intraday losses and ended up 2.2%. The sharp fluctuation in equities was likely due to the HSBC China flash manufacturing PMI for June which came in at 49.6, beating last month's final reading of 49.2. The improvement initially dampened expectations of more monetary policy easing by the central bank. Stocks entered correction territory last week when the main Shanghai index closed more than 13% lower as punters trimmed positions on stricter margin-trading rules and re-positioned for fresh IPO releases. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2044 (20-day Bollinger mid support), then at 6.2038 (base of daily Ichimoku Cloud support), before 6.2005 (daily Bollinger downtrend channel). Immediate resistance is at 6.2083 (daily Bollinger uptrend channel), then at 6.2122 (top of daily Bollinger uptrend channel), then at 6.2238 (top of daily Ichimoku Cloud resistance zone).
USD/TWD--consolidation. A supportive tone seen on the daily USD/TWD chart suggests that the pair will consolidate within a range of 30.750-31.100 demarcated by the daily Ichimoku Cloud support zone. The U.S. dollar index, which firmed up overnight on higher U.S. Treasury yields and a downturn of the euro, may prompt buying-on-dips across USD/Asia Wednesday. The yield on the 10-year U.S. Treasury note rose Tuesday after a voting member of the U.S. Federal Reserve rate-setting committee said that chances are increasing for a September rate hike, and possibly one more in December. Taiwan will release industrial output data for May at 0800 GMT. Dow Jones technical analysis suggests immediate support is at 30.870 (daily Bollinger downtrend channel), then at 30.750 (base of daily Ichimoku Cloud support zone), before 30.690 (base of daily Bollinger downtrend channel). Immediate resistance is likely at 31.000 (round-figure trading barrier, then at 31.050 (20-day Bollinger mid resistance), before 31.100 (top of daily Ichimoku Cloud resistance zone).
USD/KRW--rebound. USD/KRW may rebound toward 1,111 - where the 20-day Bollinger mid resistance line awaits - after it closed Tuesday above the Ichimoku Cloud support zone and nullified Monday's bearish closing with an engulfing bullish candlestick. Traders might take a cue from the overnight rise in benchmark U.S. Treasury yields, as well as the steep drop in EUR/USD, and cover short-USD positions. The greenback is recovering broadly after a voting member of the U.S. Federal Reserve rate-setting committee said that chances are increasing for a September rate hike, and possibly one more in December. The increasing likelihood of an interim Greece deal with its creditors may have taken the shine off the euro as investors cast attention back to currency fundamentals such as interest rates and bond yields. Dow Jones technical analysis suggests immediate support is at 1,105 (daily Bollinger downtrend channel), then at 1,102 (daily Ichimoku Cloud support), before 1,100 (round-figure trading barrier). Immediate resistance is at 1,110 (round-figure trading barrier), before 1,111 (20-day Bollinger mid resistance), before 1,117 (daily Bollinger uptrend channel).
USD/SGD--consolidation higher. USD/SGD is likely to trade in an elevated range of 1.3377-1.3444 now that it has exited the daily Bollinger downtrend channel and is back inside the daily Ichimoku Cloud consolidation zone. The USD/SGD daily chart could turn mildly bullish if the U.S. dollar closes Wednesday above the 20-day Bollinger mid resistance line at 1.3444, suggesting that the Singapore dollar will slip further versus the U.S. unit in the near term. The sharp overnight decline of the euro - possibly due to the buy-rumor-sell-fact phenomenon as an interim Greek financing deal seems imminent - has propelled the U.S. dollar index higher and triggered short-covering in most USD/Asia pairs. Tuesday's rise in the 10-year U.S. Treasury yield also added to bullish-USD sentiment. Dow Jones technical analysis shows immediate support is at 1.3400 (round-figure trading barrier), then at 1.3377 (daily Bollinger downtrend channel), before 1.3336 (base of daily Ichimoku Cloud consolidation zone). Immediate resistance is at 1.3444 (20-day Bollinger mid resistance), then at 1.3450 (psychological resistance), before 1.3500 (round-figure trading barrier).
USD/MYR--possible uptrend. USD/MYR may attempt to enter the daily Bollinger uptrend channel as the dollar opens with a firm tone in Asia Wednesday after an overnight slump of the euro coupled with higher U.S. government bond yields. If USD/MYR ends the day above 3.7560 it would be inside the uptrend channel - which could trigger bullish bets on the dollar for the near term. The increasing likelihood that Greece will manage to clinch a deal with its creditors within days has counterintuitively sunk the euro, possibly due to speculators taking profit on bets that a Greek exit from the eurozone would be averted. The overnight rise of U.S. Treasury yields - on hints from a voting member of the U.S. Federal Reserve rate-setting committee that a September rate hike might be on the cards - also added to bullish-USD pressure. Dow Jones technical analysis suggests immediate support is at 3.7220 (20-day Bollinger mid support), then at 3.7000 (round-figure trading barrier), before 3.6880 (daily Bollinger downtrend channel). Immediate resistance is at 3.7500 (psychological resistance), then at 3.7570 (daily Bollinger uptrend channel), before 3.7800 (psychological resistance).
USD/THB--possible uptrend. USD/THB may make another attempt to enter the Bollinger uptrend channel after Tuesday's fourth consecutive rise. A Wednesday close above 33.76 would confirm this positive chart signal that might trigger more U.S. dollar strength and thereby baht weakness. Bullish-USD pressure has been building as the euro extended its retreat with a sharp 1.5% overnight drop, while U.S. Treasury yields rose on hawkish comments from a voting U.S. Federal Reserve official. Thailand's weak industrial sentiment index - which on Tuesday hit a one-year low of 85.4 in May - also fuelled USD/THB buying. Dow Jones technical analysis suggests immediate support is at 33.69 (20-day Bollinger mid support), then at 33.62 (daily Bollinger downtrend channel), before 33.55 (daily Bollinger downtrend channel). Immediate resistance is at 33.76 (daily Bollinger uptrend channel), then at 33.83 (top of daily Bollinger uptrend channel), before 34.00 (round-figure trading barrier).
USD/PHP--possible uptrend. USD/PHP could rally back into the Bollinger uptrend channel, which if confirmed by a Wednesday close above 45.12 would mean that bullish technical momentum has returned. But if that chart barrier holds, USD/PHP could subside back toward the 20-day Bollinger mid support line at 44.90. Most USD/Asia pairs are starting the day on a positive tone after the U.S. dollar index rose sharply overnight, mainly due to a euro downturn but also on hawkish U.S. Federal Reserve comments. Traders may still be looking at the euro for intraday trading cues, but the Philippine central bank policy meeting on Thursday may provide a stronger fundamental driver for the peso. The central bank has said that a rate cut is not needed for now, but if there is a surprise change in policy, USD/PHP is likely to react significantly and thereby trigger fresh technical signals. Dow Jones technical analysis suggests immediate support is at 45.00 (round-figure trading barrier), then at 44.90 (20-day Bollinger mid support), before 44.80 (psychological support). Immediate resistance is likely at 45.12 (daily Bollinger uptrend channel), then at 45.20 (psychological resistance), before 45.33 (top of daily Bollinger uptrend channel).
USD/IDR--consolidation lower. The USD/IDR has turned mildly bearish with Tuesday's closing below the 20-day Bollinger mid support line, but the U.S. dollar could find its feet today after hawkish comments on interest rates from a voting member of the U.S. Federal Reserve. USD/IDR could hence consolidate just above the 13,230 entrance of the daily Bollinger downtrend channel; if this barrier is breached on a daily closing basis, more rupiah strength versus the greenback may be ahead. Indonesia's rupiah rallied 0.4% Tuesday on the back of a large government bond auction. A currency trader based offshore said that strong foreign investor participation in the auction triggered bets on rupiah-boosting inflows. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 13,230 (daily Bollinger downtrend channel), then at 13,180 (base of daily Bollinger downtrend channel), before 13,000 (round-figure trading barrier). Immediate resistance is at 13,280 (20-day Bollinger mid resistance), then at 13,340 (daily Bollinger uptrend channel), before 13,390 (top of daily Bollinger uptrend channel).
(MORE TO FOLLOW) Dow Jones Newswires
June 23, 2015 20:48 ET (00:48 GMT)
USD/INR--consolidation higher. USD/INR has been propped up by the daily Ichimoku Cloud support zone at 63.58 for the last two days, which could discourage U.S. dollar bears and lead to short-covering that might result in a breakout from the Bollinger downtrend channel that caps at 63.60. The overnight surge of the U.S. dollar index - due to the euro's sharp descent and hawkish comments from a voting member of the U.S. Federal Reserve - could be the catalyst for USD/INR to rally to 63.80 where the 20-day Bollinger mid resistance line awaits. The euro has retreated significantly likely due to punters taking profit on bets that Greece will likely clinch a deal with its creditors to avert a default and subsequent exit from the eurozone. The 10-year U.S. Treasury yield rose to its third-highest closing this year after hints from a Fed official that a September rate increase, and even another one in December, might be coming. Dow Jones technical analysis suggests immediate support is at 63.58 (daily Ichimoku Cloud support), then at 63.40 (base of daily Bollinger downtrend channel), before 63.15 (base of daily Ichimoku Cloud support zone). Immediate resistance is likely at 63.60 (top of daily Bollinger downtrend channel), then at 63.80 (20-day Bollinger mid resistance), before 64.00 (round-figure trading barrier).
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
June 23, 2015 20:48 ET (00:48 GMT)
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