(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 needs to escape the 6.2052-6.2104 range in order to trigger more technical momentum. The pair practically flatlined last week, ignoring the U.S. dollar index's strong rally - triggered by hawkish overtones from U.S. Federal Reserve chairwoman Janet Yellen. The yuan has been unreactive, likely due to authorities keeping volatility in check, amidst continuing fluctuations in the stock market. The benchmark Shanghai composite index could slide again despite Friday's rally; the index is still inside the daily Bollinger downtrend channel - a bearish technical signal. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2078 (20-day Bollinger mid support), then at 6.2052 (daily Bollinger downtrend channel), before 6.2043 (daily Ichimoku Cloud support). Immediate resistance is at 6.2104 (daily Bollinger uptrend channel), then at 6.2130 (top of daily Bollinger uptrend channel), before 6.2355 (weekly Bollinger uptrend channel).
USD/TWD--uptrend. USD/TWD is likely to keep rising now that the Bollinger uptrend channel has been activated. The uptrend channel supports the dollar at 31.250 and could lead toward the weekly Bollinger uptrend channel at 31.420 in the days ahead. The U.S. dollar continues to charge higher against the majors, still driven by last week's comments from U.S. Federal Reserve chairwoman Janet Yellen that an interest rate increase this year might be appropriate. Bullishness for the greenback is also showing in the offshore market, where the price of the benchmark 1-month USD/TWD nondeliverable forward contract has risen to 0.015 above the spot contract price. Dow Jones technical analysis suggests immediate support is at 31.250 (base of daily Bollinger uptrend channel), then at 31.150 (20-day Bollinger mid support), before 31.050 (daily Bollinger downtrend channel). Immediate resistance is likely at 31.350 (top of daily Bollinger uptrend channel), then at 31.420 (weekly Bollinger uptrend channel), before 31.500 (psychological resistance).
USD/KRW--uptrend. USD/KRW remains in a technical uptrend and has chalked up a new 2-year high of 1,151.0, after surpassing Thursday's peak of 1,150.4. The Bollinger uptrend channel supports the pair at 1,140 - also a round-figure trading barrier. The U.S. dollar is still on the rise, as investors react to the increasing likelihood that the U.S. Federal Reserve will lift interest rates later this year. If U.S. interest rates rise, it will become less attractive to be short the U.S. dollar versus high-yielding emerging market currencies, and this could prompt short-covering. Dow Jones technical analysis suggests immediate support is at 1,150 (round-figure trading barrier), then at 1,140 (base of daily Bollinger uptrend channel and round-figure trading barrier), before 1,130 (round-figure trading barrier). Immediate resistance is at 1,160 (round-figure trading barrier), before 1,170 (round-figure trading barrier).
USD/SGD--uptrend. USD/SGD has made a new three-month high, as the greenback continues to climb broadly on expectations that the U.S. Federal Reserve will lift interest rates later this year, possibly as soon as September. USD/SGD is about to enter the weekly Bollinger uptrend channel, which confirmed by a Friday close above 1.3689 would enhance the bullish chart outlook for the pair. While the Fed is likely to raise interest rates, some analysts are considering the possibility that the Monetary Authority of Singapore may do the opposite and ease policy - by weakening its currency - at its October meeting to prop up a slowing economy that is also facing deflation. Dow Jones technical analysis shows immediate support is at 1.3689 (base of weekly Bollinger uptrend channel), then at 1.3611 (base of daily Bollinger uptrend channel), before 1.3600 (round-figure trading barrier). Immediate resistance is at 1.3700 (round-figure trading barrier), then at 1.3750 (psychological resistance), before 1.3800 (round-figure trading barrier).
USD/MYR--uptrend. USD/MYR is teetering at the edge of the Bollinger uptrend channel as the dollar struggles to rise against the ringgit due to suspected intervention by the Malaysia central bank over the past week. The greenback, which continues to rally against most other currencies - due to U.S. rate-increase expectations - has flatlined against the Malaysia ringgit in recent days. Aside from USD-strength due to interest rate expectations, additional pressure on the ringgit may come from the recent drop in crude oil prices - due to the Iran nuclear sanctions deal - which threatens Malaysia's oil export revenues. This could have a negative impact on Malaysia's economy and its trade balance in the medium to long term. Dow Jones technical analysis suggests immediate support is at 3.8080 (base of daily Bollinger uptrend channel), then at 3.8000 (round-figure trading barrier), before 3.7850 (20-day Bollinger mid support). Immediate resistance is at 3.8300 (top of daily Bollinger uptrend channel), before 3.8500 (psychological resistance).
USD/THB--uptrend. USD/THB appears buoyant on the chart still, though immediate upside may be limited by the ceiling of the daily Bollinger uptrend channel at 34.25. USD/THB could consolidate slightly lower toward the 34.09 base of the channel before making another move higher in the days ahead. The U.S. dollar has been rising since last week when the U.S. Federal Reserve chairwoman hinted that a rate increase this year is on the cards. The dollar hit a new 6-year high versus the Thai baht on Thursday, but then retreated on speculation that the Bank of Thailand had intervened in the spot market to slow the baht's decline. Dow Jones technical analysis suggests immediate support is at 34.09 (base of daily Bollinger uptrend channel), then at 34.00 (round-figure trading barrier), before 33.92 (20-day Bollinger mid support). Immediate resistance is at 34.42 (top of weekly Bollinger uptrend channel), before 34.50 (round-figure trading barrier).
USD/PHP--uptrend. USD/PHP likely keeps rising in reaction to Friday's third consecutive jump in the U.S. dollar index. The USD/PHP pair is aiming toward the 45.37 top of the weekly Bollinger uptrend channel. The greenback is broadly stronger on bullish momentum triggered by last week's comments from the U.S. Federal Reserve that interest rates may rise later this year. Fed chairwoman Janet Yellen in her testimony on monetary policy Wednesday said that a rate increase may be appropriate if the economy continues to perform as forecast. Riskier emerging market currencies are especially vulnerable to a U.S. rate increase because a rise in USD-funding costs might spur capitulation of the short-USD carry trade. Dow Jones technical analysis suggests immediate support is 45.19 (base of daily Bollinger uptrend channel), then at 45.14 (20-day Bollinger mid support), before 45.08 (daily Bollinger downtrend channel). Immediate resistance is likely at 45.25 (top of daily Bollinger uptrend channel), then at 45.37 (top of weekly Bollinger uptrend channel), before 45.50 (psychological resistance).
USD/IDR--closed.
USD/INR--consolidation, possible uptrend. USD/INR may consolidate again, with a chance of turning bullish if it ends Monday above 63.56 and thus inside the daily Bollinger uptrend channel. While the greenback is still rising against other currencies after hawkish comments from U.S. Federal Reserve chairwoman Janet Yellen last week, the rupee has been resilient - due to lower crude oil prices. Cheaper oil in the medium to long term is expected with the Iran nuclear sanctions deal, which is beneficial for India's current account deficit and thereby the rupee. India's rupee has in the past suffered due to investor concern over its large current account deficit - mainly due to expensive energy imports. Dow Jones technical analysis suggests immediate support is at 63.45 (20-day Bollinger mid support), then at 63.34 (daily Bollinger downtrend channel), before 63.22 (base of daily Bollinger downtrend channel). Immediate resistance is likely at 63.57 (daily Bollinger uptrend channel), then at 63.69 (top of daily Bollinger uptrend channel), before 63.87 (top of daily Ichimoku Cloud 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
July 19, 2015 20:43 ET (00:43 GMT)
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