(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 is a small step away from confirming a bullish technical stance on the daily chart. A Wednesday close above 6.2097 would take the pair clear of the Ichimoku Cloud resistance zone and simultaneously into the Bollinger uptrend channel. But a USD/CNY rally ahead, if any, would likely be gradual, judging by the currently gentle trajectory of the uptrend channel. The yuan has started to show some correlation with domestic stocks in China. Equities continue to freefall despite a raft of new measures by authorities to boost stock-buying and to deter sellers. A large portion of listed firms requested for trading halts Tuesday, channeling more fear into investors. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2097 (base of daily Bollinger uptrend channel and top of Ichimoku Cloud resistance zone), then at 6.2072 (20-day Bollinger mid support), before 6.2047 (daily Bollinger downtrend channel). Immediate resistance is at 6.2122 (top of daily Bollinger uptrend channel), before 6.2355 (weekly Bollinger uptrend channel).
USD/TWD--consolidation. Consolidation may continue for USD/TWD due to mixed factors acting on the U.S. dollar. While the euro subsided further overnight, pushing the U.S. dollar index higher, the yield on the benchmark 10-year U.S. Treasury note fell due to buying of safe-haven bonds, thus acting as a counterweight on the greenback. 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. While uncertainty still surrounds the Greece-eurozone situation, markets are focused on today's release of the U.S. Federal Reserve's FOMC minutes which might reveal a more hawkish stance that would add to U.S. dollar bullishness. Dow Jones technical analysis suggests immediate support is at 31.050 (daily Ichimoku Cloud support and daily Bollinger downtrend channel), then at 31.000 (round-figure trading barrier), before 30.960 (base of daily Bollinger uptrend channel). Immediate resistance is likely at 31.140 (20-day Bollinger mid resistance), then at 31.230 (daily Bollinger uptrend channel), before 31.320 (top of daily Bollinger uptrend channel).
USD/KRW--uptrend. USD/KRW opens with a bullish tone, gapping higher to 1,133.0 from its Tuesday close of 1,130.2. The dollar is rising on persistent euro weakness as eurogroup ministers continue to debate over Greece, and expectations that the U.S. Federal Reserve's FOMC minutes to be released later today might show a more hawkish stance on interest rates. USD/KRW might breach the 1,136 top of the weekly Bollinger uptrend channel and touch the 1,140 round-figure trading barrier before stalling. Adding to U.S. dollar demand is weak risk appetite; despite Wall Street managing to reverse losses and close higher Tuesday, South Korea's Kospi is down 0.3% in early trade today. Dow Jones technical analysis suggests immediate support is at 1,130 (round-figure trading barrier), then at 1,1254 (base of daily Bollinger uptrend channel), before 1,120 (round-figure trading barrier). Immediate resistance is at 1,136 (top of weekly Bollinger uptrend channel), before 1,140 (round-figure trading barrier).
USD/SGD--uptrend. USD/SGD is now above the daily Ichimoku Cloud resistance zone and also inside the Bollinger uptrend channel, increasing the odds of a prolonged rally in the days ahead. The pair could next aim for the 1.3600 round-figure trading barrier and might notch a three-month high if it surpasses June's peak of 1.3630. The U.S. dollar is firmer Wednesday as the euro declines below 1.1000 on mounting uncertainty as to whether eurozone leaders will try to keep Greece in the currency union. The greenback is also getting a boost due to expectations that the minutes of the U.S. Federal Reserve's last monetary policy meeting--to be released later today--might reveal a hawkish tone on interest rates. Dow Jones technical analysis shows immediate support is at 1.3502 (base of daily Bollinger uptrend channel), then at 1.3500 (round-figure trading barrier), before 1.3474 (daily Ichimoku Cloud support). Immediate resistance is at 1.3563 (top of daily Bollinger uptrend channel), then at 1.3600 (round-figure trading barrier), before 1.3630 (June high).
USD/MYR--uptrend. USD/MYR appears to be well-supported near the round-figure trading barrier of 3.8000--the level that the government pegged it at from 1999-2005--and could keep rising due to both external and domestic factors. Euro weakness, coupled with hawkish expectations of the U.S. Federal Reserve's FOMC minutes due later, has been pushing the U.S. dollar higher broadly. Domestically, accusations of corruption against prime minister Najib Razak have rocked political stability and may be affecting investor confidence--yields on Malaysia government bonds have risen this week, indicative of bond-selling; nearly half of Malaysia's debt is owned by foreigners. USD/MYR has a bullish technical bias as long as it closes above 3.7860 and thus inside the Bollinger uptrend channel. Dow Jones technical analysis suggests immediate support is at 3.8000 (round-figure trading barrier), then at 3.7860 (base of daily Bollinger uptrend channel), before 3.7610 (20-day Bollinger mid support). Immediate resistance is at 3.8200 (psychological resistance), before 3.8500 (psychological resistance).
USD/THB--uptrend. USD/THB's sharp rally Tuesday affirmed that technical momentum is rising, implying that the baht could weaken further against the U.S. dollar. The pair briefly broke the 34.00 round-figure trading barrier and hit a 5.5-year high of 34.02 as the U.S. dollar rose on euro weakness and possible bullish bets before the release of the U.S. Federal Reserve's FOMC meeting minutes today. The daily and weekly USD/THB charts are now both bullish, suggesting that the pair could reach 34.31--the top of the weekly Bollinger uptrend channel--before finding resistance. Risk appetite has dwindled recently as investors hurt by China's stock market freefall may be trimming other risky assets in emerging Asia markets. Dow Jones technical analysis suggests immediate support is at 34.00 (round-figure trading barrier), then at 33.85 (base of daily Bollinger uptrend channel), before 33.75 (20-day Bollinger mid support). Immediate resistance is at 34.20 (psychological resistance), before 34.31 (top of weekly Bollinger uptrend channel).
USD/PHP--possible uptrend. USD/PHP may climb into the daily Bollinger uptrend channel at 45.18 as the U.S. dollar index broke through a key resistance overnight as the euro sank again. The peso has been more resilient that its regional emerging market currency peers, but may be unable to fend off the dollar's rise as multiple factors converge to boost demand for the safe haven currency. While the euro slides as eurozone leaders continue to debate over Greece, the market is expecting a hawkish tone in the U.S. Federal Reserve's FOMC minutes due to be released later. Additionally, risk appetite for emerging market assets has weakened with China's stock market freefall that could soon start to drag on regional stock markets and spark contagion; a flight to safety by foreign investors could boost the U.S. dollar even higher. Dow Jones technical analysis suggests immediate support is at 45.18 (daily Bollinger uptrend channel), then at 45.10 (20-day Bollinger mid support), before 45.02 (daily Bollinger downtrend channel). Immediate resistance is likely at 45.25 (top of daily Bollinger uptrend channel), then at 45.32 (top of weekly Bollinger uptrend channel), before 45.50 (psychological resistance).
USD/IDR--possible uptrend. USD/IDR could be lifted by the broad rise of the U.S. dollar and may hence trigger a bullish chart signal. If USD/IDR closes Wednesday above 13,350 it would be inside the daily Bollinger uptrend channel and thus more likely to keep rising--implying a weaker rupiah versus the U.S. dollar ahead. While high-yielding rupiah assets are still attractive to investors in a global environment of near-zero interest rates, underlying U.S. dollar strength stemming from euro weakness and U.S. rate hike expectations may dampen their appeal. If the U.S. dollar keeps rising broadly, gains made from high-yield Indonesia government bonds may be eroded by currency weakness. The rupiah is the second-worst performer in Asia this year, down 7.1% versus the greenback. Dow Jones technical analysis suggests immediate support for spot USD/IDR is at 13,320 (20-day Bollinger mid support), then at 13,300 (daily Bollinger downtrend channel), before 13,270 (base of daily Bollinger downtrend channel). Immediate resistance is at 13,350 (daily Bollinger uptrend channel), then at 13,370 (top of daily Bollinger uptrend channel), before 13,440 (top of weekly Bollinger uptrend channel).
(MORE TO FOLLOW) Dow Jones Newswires
July 07, 2015 21:11 ET (01:11 GMT)
USD/INR--consolidation. USD/INR has temporarily lost its bearish technical bias due to overarching U.S. dollar strength--stemming from euro weakness and a possibly hawkish tone in the U.S. Federal Reserve FOMC minutes due later today. The rupee has thus given up gains that may have come with the recent slide of crude oil prices due to global oversupply. USD/INR may consolidate in a range of 63.36-63.75 for now due to conflicting factors working on the pair. Cheap oil is a boon for India's growth and current account balance, but the greenback is likely to stay strong as the euro crumbles under Greek uncertainty--thus pushing the U.S. dollar index higher--and risk appetite in general is poor due to China's stock market collapse. Dow Jones technical analysis suggests immediate support is at 63.36 (daily Bollinger downtrend channel), then at 63.15 (base of daily Ichimoku Cloud support), before 63.10 (base of daily Bollinger downtrend channel). Immediate resistance is likely at 63.63 (20-day Bollinger mid resistance), then at 63.75 (top of daily Ichimoku Cloud resistance), before 63.90 (daily 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 07, 2015 21:11 ET (01:11 GMT)
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