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. USD/CNY has been stuck in a narrow range and likely remains that way as the authorities engineer stability in the spot market by direct intervention. The yuan's stability relative to other currencies may be another selling point as China attempts to gain approval for the renminbi into the reserve currency basket of the International Monetary Fund. The authorities announced Friday new guidelines for reporting of reserve assets and foreign debt, which will make them in line with the IMF's benchmarks, taking another step toward meeting global standards of financial accountability. Stocks on the Shanghai composite index appear to have ended their recent freefall, with the index rising out of the daily Bollinger downtrend channel signifying a rebound higher might be in order. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2079 (20-day Bollinger mid support), then at 6.2053 (daily Bollinger downtrend channel), before 6.2043 (daily Ichimoku Cloud support). Immediate resistance is at 6.2105 (daily Bollinger uptrend channel), then at 6.2132 (top of daily Bollinger uptrend channel), before 6.2355 (weekly Bollinger uptrend channel).
USD/TWD--consolidation within uptrend. Overnight U.S. dollar index weakness could drag USD/TWD lower Wednesday. The pair could hence consolidate toward the 31.300 base of the Bollinger uptrend channel. While the medium-to-long term view for the greenback is still bullish, on expectations that U.S. interest rates will rise later this year, profit-taking of long-USD positions was blamed for Tuesday's selloff. The change in short-term speculative sentiment could see the price of the benchmark 1-month USD/TWD nondeliverable forward contract fall back under par versus the spot contract price; the 1-month contract was trading at just above par Tuesday. Dow Jones technical analysis suggests immediate support is at 31.300 (base of daily Bollinger uptrend channel), then at 31.190 (20-day Bollinger mid support), before 31.080 (daily Bollinger downtrend channel). Immediate resistance is likely at 31.400 (top of daily Bollinger uptrend channel), then at 31.420 (weekly Bollinger uptrend channel), before 31.500 (psychological resistance).
USD/KRW--consolidation within uptrend. USD/KRW gaps lower Wednesday following an overnight retreat of the U.S. dollar index--likely due to profit-taking on long-USD positions which have been making gains for the previous three sessions. The South Korea won has hence recovered from Tuesday's two-year low of 1,159.9 to the U.S. dollar. The medium-term view for the U.S. dollar is likely still positive on U.S. interest rate-increase expectations, and this could keep the daily Bollinger uptrend channel in effect--contingent on a Wednesday closing above 1,145. But if USD/KRW ends the day below, a deeper pullback could be seen in the days ahead. Dow Jones technical analysis suggests immediate support is at 1,150 (round-figure trading barrier), then at 1,145 (base of daily Bollinger uptrend channel), before 1,140 (round-figure trading barrier). Immediate resistance is at 1,160 (round-figure trading barrier), then at 1,163.5 (July 2013 peak), before 1,170 (round-figure trading barrier).
USD/SGD--consolidation within uptrend. USD/SGD has snapped back to the base of the daily Bollinger uptrend channel due to an overnight rebound of the euro--which mainly contributed to the decline of the U.S. dollar index. The bullish chart signal for USD/SGD will however remain as long as the pair ends Wednesday above 1.3632 and thus inside the uptrend channel. The U.S. dollar experienced profit-taking Tuesday as ratings agency S&P upgraded Greece two notches to CCC+ from CCC- and said the odds of Greece leaving the eurozone have diminished, triggering a euro rally. While Singapore's economic outlook remains somber, the Monetary Authority of Singapore said that policy remains appropriate and that it expects inflation to rebound in 2016; the city-state has already seen seven months of deflation. Dow Jones technical analysis shows immediate support is at 1.3632 (base of daily Bollinger uptrend channel), then at 1.3600 (round-figure trading barrier), before 1.3550 (20-day Bollinger mid support). Immediate resistance is at 1.3684 (weekly Bollinger uptrend channel), then at 1.3700 (round-figure trading barrier), before 1.3715 (top of daily Bollinger uptrend channel).
USD/MYR--consolidation lower. After a week of staying capped by suspected central bank intervention in the face of the broad greenback rally, USD/MYR is on its way down as the euro rebounded significantly overnight, depressing the U.S. dollar index. USD/MYR has now nullified its bullish chart signal and may consolidate near the 20-day Bollinger mid support line of 3.7900. If this floor breaks, the pair could slide to the 3.7710 entrance of the Bollinger downtrend channel. The U.S. dollar is broadly lower as investor appetite for risky assets rises after Tuesday's Greece upgrade by ratings agency S&P; the announcement triggered a 1.0% bounce for the euro. The ringgit has risen as much as 0.5% versus the U.S. dollar Wednesday. Dow Jones technical analysis suggests immediate support is at 3.7900 (20-day Bollinger mid support), then at 3.7710 (daily Bollinger downtrend channel), before 3.7520 (base of daily Bollinger downtrend channel). Immediate resistance is at 3.8000 (round-figure trading barrier), then at 3.8090 (daily Bollinger uptrend channel), before 3.8280 (top of daily Bollinger uptrend channel).
USD/THB--pullback within uptrend. USD/THB is likely to retreat further from the six-year high notched Tuesday as risk appetite returns after ratings agency S&P upgraded Greece by notches and said the chance of it leaving the eurozone has reduced. The safe haven U.S. dollar thus fell, most prominently against the euro. The baht lost as much as 0.9% this week versus the dollar but could recover nearly all its losses if USD/THB falls back down to the immediate technical support at 34.23--the base of the daily Bollinger uptrend channel. If this floor is breached by Wednesday's close, more baht strength may return. Dow Jones technical analysis suggests immediate support is at 34.23 (base of daily Bollinger uptrend channel), then at 34.00 (round-figure trading barrier and 20-day Bollinger mid support). Immediate resistance is at 34.46 (top of daily Bollinger uptrend channel), then at 34.50 (psychological resistance), then at 34.59 (top of weekly Bollinger uptrend channel).
USD/PHP--uptrend may end. Broad U.S. dollar weakness--due to an overnight 1.0% bounce of the euro--is likely to weigh on USD/PHP. The latter could nullify its current bullish technical bias with a Wednesday closing below 45.21, and then slide further implying more peso strength versus the U.S. dollar. The euro rebounded Tuesday after ratings agency S&P upgraded Greece by two notches on the acceptance of fresh bailout measures, which decrease the odds of a Greek exit from the eurozone. Risk appetite has hence improved, and this may dampen demand for the safe haven U.S. dollar. Dow Jones technical analysis suggests immediate support is 45.21 (base of daily Bollinger uptrend channel), then at 45.15 (20-day Bollinger mid support), before 45.09 (daily Bollinger downtrend channel). Immediate resistance is likely at 45.28 (top of daily Bollinger uptrend channel), then at 45.40 (top of weekly Bollinger uptrend channel), before 45.50 (psychological resistance).
USD/IDR--consolidation. USD/IDR may reopen unchanged after three days of market closure due to public holidays. Over the last three days the U.S. dollar index rallied on U.S. interest rate-increase expectations, but Tuesday's sharp euro bounce on the S&P upgrade of Greece has nullified the greenback's strength. USD/IDR is hence likely to remain caught in a technical consolidation range of 13,310-13,340 demarcated by the respective entrances of the daily Bollinger downtrend and uptrend channels. If this range is broken, technical momentum would increase. In the background, crude oil prices are staying down, which is good for Indonesia's current-account balance and thereby the rupiah. Concerns over Indonesia's chronic current account deficit--partly due to costly energy imports--have in the past weighed on the rupiah. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 13,330 (20-day Bollinger mid support), then at 13,310 (daily Bollinger downtrend channel), then at 13,290 (base of daily Bollinger downtrend channel), before 13,270 (daily Ichimoku Cloud support zone). Immediate resistance is at 13,340 (daily Bollinger uptrend channel), then at 13,360 (top of daily Bollinger uptrend channel), before 13,440 (top of weekly Bollinger uptrend channel).
(MORE TO FOLLOW) Dow Jones Newswires
July 21, 2015 20:59 ET (00:59 GMT)
USD/INR--consolidation lower. USD/INR is likely to fall out from the Bollinger uptrend channel due to a sharp overnight euro rally which dragged the U.S. dollar index much lower-- nullifying this week's gains. Although the fundamentals still support a stronger greenback--the U.S. Federal Reserve will likely lift interest rates as soon as September--there was profit-taking of long-USD positions Tuesday after the surprise S&P ratings upgrade of Greece which boosted the euro by 1.0%. The outlook for India, and thereby the rupee--has been getting rosier due to forecasts for cheaper oil in the medium- to long-term on the Iran nuclear sanctions deal, which is beneficial for India's current account deficit. 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 63.25 (base of daily Ichimoku Cloud support zone). Immediate resistance is likely at 63.57 (daily Bollinger uptrend channel), then at 63.69 (top of daily Bollinger uptrend channel), before 63.88 (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 21, 2015 20:59 ET (00:59 GMT)
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