(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. The yuan could hold steady despite drama unfolding over the weekend with China's central bank cutting its benchmark interest rate and freeing up lending reserves for select banks, and Greece edging closer to an exit from the eurozone with its prime minister calling for a referendum on a financial bailout. The yuan may react less than expected because of hope that it could soon be included in the International Monetary Fund's list of reserve currencies. The IMF is expected to announce its decision for the yuan's inclusion into the basket of currencies known as Special Depository Rights. If the yuan passes this critical test, its value could rise sharply as investors jump in on the IMF's vote of approval. USD/CNY is currently caught in a narrow range spanning 6.2036-6.2093 but may take on a bearish tone if it ends Monday below this range. Conversely, a mild bullish bias would appear if it closes Monday above this range and thus inside the Bollinger uptrend channel--suggesting that the yuan could weaken in the days ahead. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2053 (20-day Bollinger mid support), then at 6.2036 (base of daily Ichimoku Cloud support), before 6.2013 (daily Bollinger downtrend channel). Immediate resistance is at 6.2093 (daily Bollinger uptrend channel), then at 6.2133 (top of daily Bollinger uptrend channel), before 6.2226 (top of daily Ichimoku Cloud resistance zone).
USD/TWD--possible uptrend. USD/TWD is rising out of the daily Ichimoku Cloud consolidation zone and could break into the Bollinger uptrend channel as the safe haven U.S. dollar surges broadly on fears of a Greek exit from the eurozone. The USD/TWD would take on a bullish technical bias on the short-term chart if it ends Monday above 31.230 and thus inside the Bollinger uptrend channel. The diminishing price difference between the USD/TWD spot contract and the benchmark 1-month nondeliverable forward contract, which trades nearly at par, is a sign of increasing USD bullishness among speculators. Over the weekend, Greece took a step closer to exiting the eurozone as its prime minister called for a referendum on further bailout measures. Greek banks are shut for the week and citizens have been withdrawing their euros in a panic, while global stock market futures have tanked in reaction to the news. Dow Jones technical analysis suggests immediate support is at 31.100 (20-day Bollinger mid line and Ichimoku Cloud support), then at 31.000 (round-figure trading barrier), before 30.970 (daily Bollinger downtrend channel). Immediate resistance is likely at 31.230 (daily Bollinger uptrend channel), then at 31.360 (top of daily Bollinger uptrend channel), before 31.500 (psychological resistance).
USD/KRW--uptrend. USD/KRW gaps higher as the Greek government's call for a vote on further eurozone bailout measures over the weekend--a possible precursor to an exit from the eurozone--tanked the euro and provided a catalyst for widespread trimming of short-USD positions. The resulting sharp rise of the U.S. dollar index has sent most USD/Asia pairs significantly higher Monday. The daily USD/KRW chart is now bullish as the pair enters the Bollinger uptrend channel, suggesting that the dollar will keep rising in the near term. The South Korea won is currently down 0.8% versus the U.S. dollar but the USD/KRW pair appears slightly overextended on the daily chart with today's spike - suggesting that the move may be running out of steam for now. Dow Jones technical analysis suggests immediate support is at 1,120 (round-figure trading barrier), then at 1,118 (base of daily Bollinger uptrend channel), before 1,112 (20-day Bollinger mid support). Immediate resistance is at 1,128 (top of weekly Bollinger uptrend channel), then at 1,130 (round-figure trading barrier), before 1,140 (round-figure trading barrier).
USD/SGD--uptrend. USD/SGD has entered the daily Bollinger uptrend channel and may appear even more bullish if it ends Monday above 1.3542 and thereby above the Ichimoku Cloud consolidation zone. The weekend announcement of a Greek referendum on further eurozone bailout measures has tanked the euro and spooked U.S. dollar shorts, sending most USD/Asia pairs sharply higher on short-covering. USD/SGD could keep rising toward 1.3600 in the near term and would display a bullish technical bias for the medium-term if it ends the week above 1.3703 and thus inside the weekly Bollinger uptrend channel. Looking ahead, the U.S. non-farm jobs report to be released Friday may further convince Federal Reserve to raise interest rates this year and thus boost the U.S. dollar again. Dow Jones technical analysis shows immediate support is at 1.3506 (base of daily Bollinger uptrend channel), then at 1.3500 (round-figure trading barrier), before 1.3442 (20-day Bollinger mid support). Immediate resistance is at 1.3542 (top of daily Ichimoku Cloud resistance), then at 1.3570 (top of daily Bollinger uptrend channel), before 1.3600 (round-figure trading barrier).
USD/MYR--uptrend. USD/MYR has entered the daily Bollinger uptrend channel and is hence likely to fall further toward 3.8000--the level at which it was pegged by the government post-Asian financial crisis. The ringgit has tumbled to a 10-year low versus the U.S. dollar as the latter jumped across the board at Monday's open due to Greece taking a step closer to leaving the eurozone. The Greek government's decision to hold a vote on whether to pursue further eurozone bailout measures has tanked the euro, causing a spike in the U.S. dollar index and widespread short-covering of U.S. dollar positions. But the ringgit is likely to receive support from the authorities, which could cushion its slide. The central bank was said to have intervened by selling U.S. dollars last week, according to a couple of traders, and may do so again this week. The ringgit has been falling alongside its peers but may be under more pressure due to domestic government corruption allegations, which have stirred political instability and thereby dented foreign investor confidence. Dow Jones technical analysis suggests immediate support is at 3.7640 (base of daily Bollinger uptrend channel), then at 3.7500 (psychological support), before 3.7400 (20-day Bollinger mid support). Immediate resistance is at 3.7800 (psychological resistance), then at 3.7900 (top of daily Bollinger uptrend channel), before 3.8000 (round-figure trading barrier).
USD/THB--uptrend. USD/THB has confirmed entry into the daily Bollinger uptrend channel and is thus more likely to keep rallying. The pair may be aiming for the 34.00 round-figure trading barrier which if breached, could trigger stoploss orders that would create a spike higher. The greenback has surged across the board after Greece's prime minister declared a referendum to decide on whether to keep on pursuing bailout aid from the eurozone. If Greece votes 'no', it could be taking another step toward leaving the eurozone, which might trigger other peripheral nations to consider it as an option. The sharp drop of the euro has sent the U.S. dollar index sharply higher, prompting widespread short-covering. Dow Jones technical analysis suggests immediate support is at 33.79 (base of daily Bollinger uptrend channel), then at 33.71 (20-day Bollinger mid support), before 33.63 (daily Bollinger downtrend channel). Immediate resistance is at 33.87 (top of daily Bollinger uptrend channel), before 34.00 (round-figure trading barrier).
USD/PHP--possible uptrend. USD/PHP is likely to shake off its recent inertia and rally into the Bollinger uptrend channel as the greenback surges broadly after Greece's weekend call for a referendum on bailout measures tanked the euro. If USD/PHP ends the day above 45.17 it would be inside the bullish channel and poised to reach 45.36 in the days ahead. Ahead of the outcome of Greece's vote on whether to continue pursuing eurozone bailout aid, punters have been selling the euro--thus boosting the U.S. dollar index--pre-empting an eventual Greek exit from the eurozone. The coming U.S. jobs report for June on Friday could be another factor keeping the U.S. dollar buoyant. Expectations are for a positive reading that would further convince the Federal Reserve to raise interest rates this year. Dow Jones technical analysis suggests immediate support is at 45.00 (round-figure trading barrier), then at 44.97 (20-day Bollinger mid support), before 44.80 (psychological support). Immediate resistance is likely at 45.17 (daily Bollinger uptrend channel), then at 45.20 (psychological resistance), before 45.36 (top of daily Bollinger uptrend channel).
(MORE TO FOLLOW) Dow Jones Newswires
June 28, 2015 21:21 ET (01:21 GMT)
USD/IDR--possible uptrend. USD/IDR is likely to rebound from Friday's mild selloff as the U.S. dollar rallies sharply across the board following the Greek government's call for a referendum on eurozone bailout measures over the weekend. The surprise move has tanked the euro, thus boosting the U.S. dollar index, and sent global stock market futures tumbling. If USD/IDR ends the day above 13,350 it would be inside the daily Bollinger uptrend channel and also above the long-term bullish trendline projected from mid-April, making it more likely that the rupiah will weaken versus the U.S. dollar in the days ahead. Aside from the euro's steep fall triggering U.S. dollar short-covering, the upcoming U.S. jobs report on Friday may be another reason for traders to be bullish on the greenback. A positive reading would make a U.S. interest rate increase this year more likely, and thus dampen appeal for high-yielding emerging market currencies such as the rupiah. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 13,300 (20-day Bollinger mid support), then at 13,260 (daily Bollinger downtrend channel), before 13,210 (base of daily Bollinger downtrend channel). Immediate resistance is at 13,340 (daily Bollinger uptrend channel), then at 13,350 (April bullish trendline), then at 13,390 (top of daily Bollinger uptrend channel), before 13,400 (top of weekly Bollinger uptrend channel).
USD/INR--consolidation higher. USD/INR could overturn its mild bearish bias and head upward as the U.S. dollar surges broadly on fears that Greece is a step closer to exiting the eurozone. The weekend announcement that Greece will hold a referendum on further eurozone bailout measures has tanked the euro, thus boosting the U.S. dollar index sharply. If USD/INR ends Monday above 63.62 it would be out of the Bollinger downtrend channel and above the daily Ichimoku Cloud consolidation zone, which could prompt short-covering that might drive the pair toward 63.77 where the 20-day Bollinger mid resistance line awaits. Dow Jones technical analysis suggests immediate support is at 63.30 (base of daily Bollinger downtrend channel), then at 63.15 (base of daily Ichimoku Cloud support zone), before 63.00 (round-figure trading barrier). Immediate resistance is likely at 63.55 (top of daily Bollinger downtrend channel), then at 63.62 (top of daily Ichimoku Cloud consolidation zone), before 63.77 (20-day Bollinger mid 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
June 28, 2015 21:21 ET (01:21 GMT)
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