(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--downtrend. The daily USD/CNY chart has turned bearish, suggesting that the yuan - which closed at a three-week high - will advance further against the U.S. dollar in the days ahead. Tuesday's bearish closing placed USD/CNY below the daily Ichimoku Cloud support zone and also inside the Bollinger downtrend channel. The pair could now be headed for the March low of 6.1805. China stocks swung around Tuesday, on optimism that the authorities are introducing more measures to spur buying, and may negate the current bearish technical bias for the Shanghai Composite Index if the rally continues Wednesday. The securities regulators have submitted draft proposals to allow pension funds to buy stocks, while there are also plans to drop the stamp duty on stock purchases. China releases its June manufacturing PMI at 0100 GMT. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2000 (round-figure trading barrier), then at 6.1987 (base of daily Bollinger downtrend channel), before 6.1805 (March low). Immediate resistance is at 6.2023 (top of daily Bollinger downtrend channel and daily Ichimoku Cloud resistance), then at 6.2059 (20-day Bollinger mid resistance), before 6.2095 (daily Bollinger uptrend channel).
USD/TWD--consolidation. USD/TWD is likely to consolidate within the daily Ichimoku Cloud support zone that spans 30.690-31.100. The U.S. dollar index rose overnight as the euro slid, but due to the limited reaction so far in Asia to the Greek bailout debacle, USD/TWD may remain stable. Currency traders are watching stocks in Asia for signs of contagion from the recent China stock market rout - which appears to have ended as the authorities pull out all stops to staunch the bleeding. The offshore USD/TWD market suggests that speculators are now slightly less bullish on the U.S. dollar - the benchmark 1-month nondeliverable forward contract trades at a 0.020 discount to the USD/TWD spot contract, as compared to Tuesday when it was trading at around par. Taiwan publishes its June manufacturing PMI data at 0150 GMT. Dow Jones technical analysis suggests immediate support is at 31.010 (daily Bollinger downtrend channel), then at 31.000 (round-figure trading barrier), before 30.900 (base of daily Bollinger downtrend channel). Immediate resistance is likely at 31.100 (top of daily Ichimoku Cloud consolidation zone), then at 31.120 (20-day Bollinger mid resistance), before 31.230 (daily Bollinger uptrend channel).
USD/KRW--consolidation. USD/KRW shed its bullish technical bias after a selloff late Tuesday, and may now consolidate in a range of 1,113-1,119 demarcated by the 20-day Bollinger mid support line and the entrance to the daily Bollinger uptrend channel. The U.S. dollar index rose slightly overnight, providing a supportive tone for most USD/Asia pairs, but the next catalyst could be domestic economic data. Exports data released earlier showed a disappointing drop of 1.8% on-year versus a forecast of a 0.4% expansion. At 0140 GMT, South Korea will release its June manufacturing PMI data; industrial output data on Tuesday showed that the economy has been slowing. Weak economic numbers would justify the government's recent injection of $13 stimulus package for the economy to cope with the negative impact of the MERS outbreak, and might spur bets on more monetary policy easing by the Bank of Korea - which would be negative for the won. Dow Jones technical analysis suggests immediate support is at 1,113 (20-day Bollinger mid support), then at 1,110 (round-figure trading barrier), before 1,106 (daily Bollinger downtrend channel). Immediate resistance is at 1,119 (daily Bollinger uptrend channel), then at 1,120 (round-figure trading barrier), before 1,125 (top of daily Bollinger uptrend channel)).
USD/SGD--consolidation. USD/SGD remains trapped in a range of 1.3379-1.3502 demarcated by the respective entrances of the Bollinger downtrend and uptrend channels. The pair lacks directional momentum unless this range is breached on a daily closing basis. USD/SGD may be supported on dips and appears more likely to rise as traders look ahead to the U.S. non-farm jobs report due Friday, which may further convince the Federal Reserve to raise interest rates this year - a positive factor for the greenback. Dow Jones technical analysis shows immediate support is at 1.3440 (20-day Bollinger mid support), then at 1.3400 (round-figure trading barrier), before 1.3379 (daily Bollinger downtrend channel). Immediate resistance is at 1.3500 (round-figure trading barrier), then at 1.3502 (daily Bollinger uptrend channel), before 1.3541 (top of daily Ichimoku Cloud resistance).
USD/MYR--possible downtrend. USD/MYR has plunged from its 10-year high notched on Tuesday after credit rating agency Fitch kept the country's sovereign debt rating at an investment grade A- and revised its outlook to stable from negative. Some analysts had said there was a possibility of a rating downgrade due to concerns over debt repayment by state investment firm 1MDB. The ringgit is up 1.0% versus the U.S. dollar on the improved Fitch outlook, and could appreciate slightly more still. USD/MYR has a bit more room to fall before reaching the 3.7240 entrance of the daily Bollinger downtrend channel; if the pair closes Wednesday below this mark, more ringgit gains are likely. Dow Jones technical analysis suggests immediate support is at 3.7240 (daily Bollinger downtrend channel), then at 3.7200 (psychological support), before 3.7060 (base of daily Bollinger downtrend channel). Immediate resistance is at 3.7440 (20-day Bollinger mid resistance), then at 3.7500 (psychological resistance), before 3.7660 (daily Bollinger uptrend channel).
USD/THB--closed.
USD/PHP--consolidation. USD/PHP may consolidate toward the 20-day Bollinger mid support line at 45.03 as the U.S. dollar index rose slightly overnight. While stock markets in the U.S. rebounded overnight, implying an improvement in risk-taking sentiment, downside for USD/PHP may be limited as the market starts to position for Friday's U.S. jobs report for June. An upbeat reading may support the Federal Reserve's inclination toward raising interest rates in September, which would fundamentally boost the U.S. dollar against most currencies. Dow Jones technical analysis suggests immediate support is at 45.03 (20-day Bollinger mid support), then at 45.00 (round-figure trading barrier), before 44.80 (psychological support). Immediate resistance is likely at 45.17 (daily Bollinger uptrend channel), then at 45.20 (psychological resistance), before 45.32 (top of daily Bollinger uptrend channel).
USD/IDR--consolidation. USD/IDR may test the topside of its current consolidation range of 13,275-13,350 as the U.S. dollar index bobbed higher overnight. The pair could reinstate a bullish technical bias if it ends the day above 13,350 and thus inside the Bollinger uptrend channel. The U.S. dollar index may edge higher in the near term as the euro is still undermined by the upcoming Greek referendum set for July 5. Although eurozone officials have said that they will not let Greece leave the currency bloc, uncertainty as to the next bailout plan for Greece may keep the euro depressed. USD/IDR may also be supported by the likelihood of an upbeat U.S. jobs report due Friday - which may bolster the case for a U.S. interest rate increase in September 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 13,310 (20-day Bollinger mid support), then at 13,275 (daily Bollinger downtrend channel), before 13,240 (base of daily Bollinger downtrend channel). Immediate resistance is at 13,350 (daily Bollinger uptrend channel), then at 13,380 (April bullish trendline and top of daily Bollinger uptrend channel), before 13,380 (June's 17-year high).
USD/INR--consolidation. USD/INR may bob in a range of 63.52-63.75 as traders stay light on positioning after recent choppiness in currency markets attributed to Greek debt default headlines. The market could however react later to India's manufacturing PMI data for June, scheduled to be released at 0500 GMT. An upbeat number could weigh USD/INR below 63.52 and thus activate the daily Bollinger downtrend channel. If the pair ends Wednesday below 63.52 it might be on its way to 63.15 in the days ahead. But mitigating U.S. dollar weakness is the upcoming U.S. non-farm payrolls report due Friday. A strong reading would increase the odds of a U.S. interest rate increase in September, and thus spur U.S. dollar buying. Dow Jones technical analysis suggests immediate support is at 63.52 (daily Bollinger downtrend channel), then at 63.30 (base of daily Bollinger downtrend channel), before 63.15 (base of daily Ichimoku Cloud support). Immediate resistance is likely at 63.65 (top of daily Ichimoku Cloud resistance), then at 63.76 (20-day Bollinger mid resistance), before 64.00 (round-figure trading barrier).
Write to Ewen Chew at ewen.chew@dowjones.com
(MORE TO FOLLOW) Dow Jones Newswires
June 30, 2015 21:09 ET (01:09 GMT)
(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 30, 2015 21:09 ET (01:09 GMT)
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