The following are projected trading ranges and outlooks for nine secondary currency pairs in Asia today:
(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. Little movement is expected for the yuan, which has been kept rock-steady against the U.S. dollar by the authorities in recent weeks. While traders are still looking forward to the yuan's inclusion into the International Monetary Fund's reserve basket of currencies, negative pressure on the yuan might arise as investors express unease over the government's recent massive stock market intervention. The world's biggest hedge fund Bridgewater - once an outspoken China bull - has changed its tune on Chinese assets because of the authorities' meddling in the equity market. The Shanghai composite stock index could extend its rebound slightly further in the near term after Tuesday's nullification of the bearish Bollinger downtrend channel. China's flash manufacturing PMI for July due at 0145 GMT might provide the impetus for stocks to rally. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2080 (20-day Bollinger mid support), then at 6.2054 (daily Bollinger downtrend channel), before 6.2043 (daily Ichimoku Cloud support). Immediate resistance is at 6.2107 (daily Bollinger uptrend channel), then at 6.2133 (top of daily Bollinger uptrend channel), before 6.2355 (weekly Bollinger uptrend channel).
USD/TWD--consolidation within uptrend. After another overnight drop in U.S. stocks, the Taiwan dollar is likely to remain under pressure, despite the U.S. dollar index slipping overnight. USD/TWD could keep rising within the Bollinger uptrend channel - a bullish chart signal. The rise in price of the benchmark 1-month USD/TWD nondeliverable forward contract in the offshore market versus the spot contract price reinforces the bullish tone in USD/TWD. The fall of U.S. tech stocks in particular has been affecting investor appetite in Taiwan - whose main export is electronics. Stocks were down 1.4% Thursday and could slide further today as Wall Street shed 0.6% overnight. Taiwan industrial output data for June released Thursday showed a drop of 1.4% on-year, better than the 3.0% drop estimated by economists. Dow Jones technical analysis suggests immediate support is at 31.340 (base of daily Bollinger uptrend channel), then at 31.230 (20-day Bollinger mid support), before 31.120 (daily Bollinger downtrend channel). Immediate resistance is likely at 31.420 (weekly Bollinger uptrend channel), then at 31.450 (top of daily Bollinger uptrend channel), before 31.500 (psychological resistance).
USD/KRW--uptrend. USD/KRW has pulled back from the 3-year high of 1,166.2 notched Thursday due to a slippage of the U.S. dollar index. But USD/KRW is still inside the Bollinger uptrend channel and hence could hit new highs in the days ahead - as long as it closes Friday above 1,151. The greenback is down slightly despite U.S. weekly jobless claims shrinking to its lowest since 1973 - which ought to persuade the U.S. Federal Reserve to lift interest rates this year. The dollar's fall was ascribed to profit-taking and also a drop in the yield on the benchmark 10-year Treasury note. Investors may be flocking to the safety of U.S. government bonds - driving prices up and hence diminishing its yield - as gold and commodities face further downside while stocks fell for a third straight session Thursday. Dow Jones technical analysis suggests immediate support is at 1,153 (base of daily Bollinger uptrend channel), then at 1,150 (round-figure trading barrier), before 1,140 (round-figure trading barrier). Immediate resistance is at 1,160 (round-figure trading barrier), then at 1,167 (top of daily Bollinger uptrend channel), before 1,170 (round-figure trading barrier).
USD/SGD--uptrend. USD/SGD remains buoyant, largely ignoring the overnight drop of the U.S. dollar index, after the much-better-than-expected U.S. weekly jobless claims report. USD/SGD is still in the Bollinger uptrend channel that supports at 1.3659 and points to an immediate target of 1.3750. The drop in U.S. weekly jobless claims to a 1973-low has traders bracing for a strong U.S. nonfarm payrolls report due Aug. 7, and thereby the likelihood that the U.S. Federal Reserve will raise interest rates soon. On Thursday, Singapore's June consumer price index fell for an eighth consecutive month, though the core inflation number edged up, reducing the chances that the Monetary Authority of Singapore will consider another policy-easing in October. Singapore will publish its industrial production output data at 0500 GMT. Dow Jones technical analysis shows immediate support is at 1.3659 (base of daily Bollinger uptrend channel), then at 1.3600 (round-figure trading barrier), before 1.3570 (20-day Bollinger mid support). Immediate resistance is at 1.3686 (weekly Bollinger uptrend channel), then at 1.3700 (round-figure trading barrier), before 1.3750 (top of daily Bollinger uptrend channel).
USD/MYR--consolidation. USD/MYR is likely to linger within its recent range of 3.7860-3.8090 as suspected intervention by the Malaysia central bank keeps a lid on the U.S. dollar. Consistent selling by recognised agents of the central bank around the 3.8060-3.8070 level in recent days has had onshore traders murmuring that Bank Negara Malaysia is determined not to let the ringgit weaken any further. The ringgit is already the poorest performer among Asia currencies this year, and has surpassed the 1999-2005 currency peg of 3.8000 to fall to a 10-year low versus the U.S. dollar. Overnight, the U.S. dollar index slipped on a drop in U.S. Treasury yields, but fundamentally ought to remain supported after U.S. weekly jobless claims data trumped expectations, making it more likely that the U.S. Federal Reserve might raise interest rates this year. Dow Jones technical analysis suggests immediate support is at 3.8000 (round-figure trading barrier), then at 3.7950 (20-day Bollinger mid support), before 3.7780 (daily Bollinger downtrend channel). Immediate resistance is at 3.8110 (daily Bollinger uptrend channel), before 3.8270 (top of daily Bollinger uptrend channel).
USD/THB--uptrend. USD/THB is still ascending toward the round-figure trading barrier of 35.00, guided by the Bollinger uptrend channel, implying more baht weakness versus the U.S. dollar to come. The key reason driving the dollar higher is still the possibility of a rise in U.S. interest rates later this year. Thursday's much-better-than-expected U.S. weekly jobless claims data, which sets up for a strong non-farm payrolls report due in the first week of August, makes it seem more likely that the U.S. Federal Reserve will raise rates. Thai authorities have said in the recent past that they would like to see the baht weaker - to help struggling exporters; analysts are bearish on Thailand's export data report due next week. Dow Jones technical analysis suggests immediate support is at 34.80 (psychological support), then at 34.45 (base of daily Bollinger uptrend channel), before 34.20 (psychological support). Immediate resistance is at 35.00 (round-figure trading barrier), before 35.20 (psychological resistance).
USD/PHP--uptrend. USD/PHP surged late Thursday, in a sign that the Philippine peso - the best performing currency in Southeast Asia this year - may be starting to crack under bullish-USD pressure. The sharp move higher in USD/PHP has steepened the trajectory of the Bollinger uptrend channel - which means that the pace of the peso's fall versus the greenback might accelerate. The U.S. dollar is still on the rise against high-yield currencies - despite an overnight slippage against the majors - due to strengthening economic data that might persuade the U.S. Federal Reserve to raise interest rates. Overnight, U.S. weekly jobless claims fell to a 42-year low. Dow Jones technical analysis suggests immediate support is 45.25 (base of daily Bollinger uptrend channel), then at 45.18 (20-day Bollinger mid support), before 45.10 (daily Bollinger downtrend channel). Immediate resistance is likely at 45.43 (top of weekly Bollinger uptrend channel), then at 45.50 (psychological resistance), before 45.60 (top of monthly Bollinger uptrend channel).
(MORE TO FOLLOW) Dow Jones Newswires
July 23, 2015 21:24 ET (01:24 GMT)
USD/IDR--uptrend. Indonesia's rupiah may briefly recover from the 17-year low versus the U.S. dollar notched Thursday, on fears of central bank intervention and a technical signal suggesting a pullback may be due. USD/IDR has overextended past the top of the daily Bollinger uptrend channel, an indication that recent moves have exceeded a statistical norm and may thus retrace temporarily. But the bullish USD/IDR chart bias will remain if the pair closes Friday above 13,360 and thus inside the uptrend channel. The Indonesia central bank has so far not voiced concern about its weakening currency - which is beneficial for exports - but as other central banks take steps to shore up currency weakness against the rising U.S. dollar, Bank Indonesia may follow suit. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 13,360 (base of daily Bollinger uptrend channel), then at 13,340 (20-day Bollinger mid support), before 13,310 (daily Bollinger downtrend channel). Immediate resistance is at 13,480 (top of weekly Bollinger uptrend channel), then at 13,500 (psychological resistance), before 13,590 (top of monthly Bollinger uptrend channel).
USD/INR--uptrend. India's rupee could slide further against the greenback, after a very strong U.S. weekly jobless claims report released overnight made it look more likely that a U.S. interest rate rise is coming. The technical-trading perspective also augments the view that USD/INR is going higher in the days ahead. USD/INR may have triggered a fresh bullish technical signal with Thursday's closing above the 63.88 ceiling of the Ichimoku Cloud consolidation zone. The breakout from the Cloud, combined with the pair's recent entry into the Bollinger uptrend channel, makes it more likely the India rupee will weaken against the U.S. dollar in the near-term. U.S. flash manufacturing PMI data due later today could bolster hawkish U.S. rate views and add to the rupee's woes. Dow Jones technical analysis suggests immediate support is at 63.88 (daily Ichimoku Cloud support), then at 63.68 (base of daily Bollinger uptrend channel), before 63.50 (psychological support). Immediate resistance is likely at 64.00 (round-figure trading barrier), then at 64.44 (top of weekly 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
July 23, 2015 21:24 ET (01:24 GMT)
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