(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--possible uptrend. USD/CNY could soon emerge from consolidation mode as the pair moves toward the upper edge of the Ichimoku Cloud resistance zone. If USD/CNY ends Tuesday above 6.2094 it would be inside the Bollinger uptrend channel and more likely to keep rising. A clean break of the Cloud's ceiling would enable the dollar to rally even higher in the near term. While the yuan still lacks technical momentum, equities continue to look bleak. Despite new measures announced by the authorities to boost stock-buying from institutions and brokerages, the Shanghai Composite Index failed to hold on to its initial 7% rally Monday and ended marginally lower. This bodes poorly for the stock index as it remains entrenched in its Bollinger downtrend channel, suggesting more weakness awaits. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2069 (20-day Bollinger mid support), then at 6.2045 (daily Bollinger downtrend channel), then at 6.2033 (base of daily Ichimoku Cloud support), before 6.2021 (base of daily Bollinger downtrend channel). Immediate resistance is at 6.2094 (daily Bollinger uptrend channel), then at 6.2118 (top of daily Bollinger uptrend channel), before 6.2197 (top of daily Ichimoku Cloud resistance zone).
USD/TWD--consolidation. USD/TWD continues to bob between the entrances of the Bollinger downtrend and uptrend channels which form a range of 31.050-31.240. The pair could turn bearish for the short term if it closes below 31.050, and conversely would gain a bullish technical bias if it closes Tuesday above 31.240. A mild bullishness can be deduced from the pricing of the benchmark 1-month nondeliverable forward contract in the offshore market. Typically priced at a discount to the spot USD/TWD contract, the 1-month contract now trades close to par, suggesting that offshore market participants - typically speculators - are bullish on the U.S. dollar. Dow Jones technical analysis suggests immediate support is at 31.100 (daily Ichimoku Cloud support), then at 31.050 (daily Bollinger downtrend channel), before 31.000 (round-figure trading barrier). Immediate resistance is likely at 31.150 (20-day Bollinger mid resistance), then at 31.240 (daily Bollinger uptrend channel), before 31.330 (top of daily Bollinger uptrend channel).
USD/KRW--uptrend. USD/KRW is likely to be led higher by the daily Bollinger uptrend channel that now supports the pair at 1,123. The immediate target is the 1,130 round-figure trading barrier which if breached could cause a spike toward the 1,135 top of the weekly Bollinger uptrend channel. The U.S. dollar is likely to remain firm generally as EUR/USD stays soft ahead of the emergency EU meeting regarding aid for Greece later today. As long as Greece's future is uncertain, the euro could be bogged down and thereby keep the greenback supported. Dow Jones technical analysis suggests immediate support is at 1,123 (base of daily Bollinger uptrend channel), then at 1,120 (round-figure trading barrier), before 1,116 (20-day Bollinger mid support). Immediate resistance is at 1,130 (round-figure trading barrier and top of daily Bollinger uptrend channel), then at 1,135 (top of weekly Bollinger uptrend channel), before 1,140 (round-figure trading barrier).
USD/SGD--uptrend. USD/SGD is likely to climb in the days ahead now that the pair has exited the top of the daily Ichimoku Cloud resistance zone and is also inside the Bollinger uptrend channel. As long as USD/SGD ends Tuesday above 1.3488 these bullish chart signals will be affirmed, motivating traders to buy the U.S. dollar. The uncertainty of Greece's future in the eurozone is keeping the euro pinned lower, thus propping up the U.S. dollar index. Additionally, the minutes from the U.S. Federal Reserve's last monetary policy meeting - to be released Wednesday - might reveal a hawkish tone on interest rates that would further boost the U.S. dollar. Dow Jones technical analysis shows immediate support at 1.3500 (round-figure trading barrier), then at 1.3488 (base of daily Bollinger uptrend channel and Ichimoku Cloud support), then at 1.3435 (20-day Bollinger mid support), before 1.3400 (round-figure trading barrier). Immediate resistance is at 1.3540 (top of daily Bollinger uptrend channel), before 1.3600 (round-figure trading barrier).
USD/MYR--uptrend. USD/MYR remains biased higher on the daily chart, helped by both external and internal factors. USD/MYR has a bullish tone imbued by the Bollinger uptrend channel that now supports at 3.7820. The ringgit has been making fresh 16.5-year lows versus the U.S. dollar this week as the U.S. dollar index rallies on a depressed euro, and political instability rocks Malaysia investors' confidence. The Malaysia central bank chief last week said that the ringgit's weakness is temporary and due to external factors, but traders suspected the central bank had nonetheless intervened in the spot market to stem its losses; Bank Negara could step in again if the USD/MYR rallies excessively again this week. The ringgit is now the worst performer among Asia currencies, down 8.4% for the year, and weaker than when it was pegged to the U.S. dollar at 3.8000 in the aftermath of the Asian financial crisis. Dow Jones technical analysis suggests immediate support is at 3.8000 (round-figure trading barrier), then at 3.7820 (base of daily Bollinger uptrend channel), before 3.7580 (20-day Bollinger mid support). Immediate resistance is at 3.8200 (psychological resistance), before 3.8500 (psychological resistance).
USD/THB--uptrend. USD/THB is finally showing signs of momentum after weeks of bobbing in and out of the daily Bollinger uptrend channel. The bullish technical signal was confirmed by Monday's convincing rally past 33.80. The uptrend channel now points toward the 34.00 round-figure trading barrier - which if breached could trigger a stoploss-driven spike to 34.20. The euro's weakness - due to uncertainty over Greece's future in the eurozone - has been the main culprit for U.S. dollar strength. But Wednesday's release of the U.S. Federal Reserve's FOMC meeting minutes could add to bullish-USD pressure. Dow Jones technical analysis suggests immediate support is at 33.80 (base of daily Bollinger uptrend channel), then at 33.72 (20-day Bollinger mid support), before 33.64 (daily Bollinger downtrend channel). Immediate resistance is at 33.87 (top of daily Bollinger uptrend channel), then at 34.00 (round-figure trading barrier), before 34.20 (psychological resistance).
USD/PHP--possible uptrend. USD/PHP may inch up into the daily Bollinger uptrend channel at 45.17 on peer pressure, as the U.S. dollar rallies across other Asia currencies due to mild risk aversion stemming from uncertainty in the eurozone. If USD/PHP closes Tuesday above 45.17, the pair could be on track toward the 45.30 top of the weekly Bollinger uptrend channel. The U.S. dollar index is propped up by the euro which remains subdued after Greece voted against further austerity measures in exchange for another financial bailout. Risk-taking sentiment remains weak as investors await the outcome of the emergency EU meeting scheduled for later today to determine if Greece will get a new bailout or be forced out of the eurozone. Germany, the EU's strongest member, has for now ruled out fresh bailout negotiations. Dow Jones technical analysis suggests immediate support is at 45.09 (20-day Bollinger mid support), then at 45.01 (daily Bollinger downtrend channel), before 45.00 (round-figure trading barrier). Immediate resistance is likely at 45.17 (daily Bollinger uptrend channel), then at 45.24 (top of daily Bollinger uptrend channel), before 45.30 (top of weekly Bollinger uptrend channel).
USD/IDR--possible uptrend. USD/IDR needs to close Tuesday above 13,350 in order to affirm the bullish signal of the Bollinger uptrend channel - which was barely triggered by Monday's closing. Confirmation of the uptrend channel coming into play could motivate speculative U.S. dollar-buying that might lead the pair toward the 13,440 top of the weekly Bollinger uptrend channel. Although data shows that foreign investors are still piling into Indonesia's stocks and bonds - according to DBS Research Group - which ought to be positive for the rupiah, underlying U.S. dollar strength stemming from euro weakness and U.S. rate increase expectations has been responsible for relative rupiah weakness. The rupiah is the second-worst performer in Asia this year, down 7.3% versus the greenback. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 13,350 (base of daily Bollinger uptrend channel), then at 13,320 (20-day Bollinger mid support), before 13,300 (daily Bollinger downtrend channel). Immediate resistance is at 13,370 (top of daily Bollinger uptrend channel), then at 13,440 (top of weekly Bollinger uptrend channel), before 13,500 (psychological resistance).
(MORE TO FOLLOW) Dow Jones Newswires
July 06, 2015 21:10 ET (01:10 GMT)
USD/INR--downtrend. USD/INR has held on to its bearish technical bias despite overarching U.S. dollar strength stemming from persistent euro weakness. The pair ended Monday back inside the Bollinger downtrend channel in spite of the greenback's broader rise in Asia. The rupee has been resilient and may add to recent gains if USD/INR closes Tuesday below 63.15 and thus below the Ichimoku Cloud support zone. The recent slide in oil prices - on renewed supply glut concerns - could be part of the reason for investor optimism for India. The country is heavily reliant on imported energy, thus a prolonged decline in oil prices is positive for economic growth and India's current account balance - a confidence-inspiring factor for foreign investors. Dow Jones technical analysis suggests immediate support is at 63.15 (base of daily Ichimoku Cloud support), then at 63.10 (base of daily Bollinger downtrend channel), before 63.00 (round-figure trading barrier). Immediate resistance is likely at 63.36 (top of daily Bollinger downtrend channel), then at 63.64 (20-day Bollinger mid resistance), before 63.74 (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 06, 2015 21:10 ET (01:10 GMT)
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