(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 appears likely to keep drifting sideways, lacking technical momentum on the daily chart. A pullback of U.S. dollar index strength overnight could mean a slightly lower daily USD/CNY benchmark rate set by the People's Bank of China, which typically acts as a beacon for spot USD/CNY. The yuan has been steady of late, likely due to authorities keeping volatility in check, amidst wild fluctuations in the stock market. The benchmark Shanghai Composite Index may have run out of steam for now, as the index pulled back Tuesday and currently remains inside the daily Bollinger downtrend channel - a bearish technical signal. China's second-quarter GDP data, as well as retail sales and industrial output figures, will be released at 0200 GMT, and might move stocks if the data surprises in either direction. Dow Jones technical analysis suggests immediate support for spot USD/CNY is at 6.2076 (20-day Bollinger mid support), then at 6.2051 (daily Bollinger downtrend channel), before 6.2043 (daily Ichimoku Cloud support). Immediate resistance is at 6.2102 (daily Bollinger uptrend channel), then at 6.2127 (top of daily Bollinger uptrend channel), before 6.2355 (weekly Bollinger uptrend channel).
USD/TWD--uptrend. USD/TWD has tentatively triggered a bullish chart signal that might spur more USD-buying in the near term. If USD/TWD ends Wednesday above 31.240 the daily Bollinger uptrend channel will be verified, and could lead the pair higher toward 31.500 in the days ahead. Bullishness for the greenback can also be seen in the offshore market, where the price of the benchmark 1-month USD/TWD nondeliverable forward contract has risen above par to the spot contract price, versus Tuesday's discount of 0.020. The U.S. dollar is likely to stay buoyant as the U.S. Federal Reserve appears more willing to raise rates in September, now that Greece will likely remain in the eurozone thus averting global financial market disorder. Dow Jones technical analysis suggests immediate support is at 31.240 (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 31.330 (top of daily Bollinger uptrend channel), before 31.500 (psychological resistance).
USD/KRW--uptrend. USD/KRW remains near its two-year high as the U.S. dollar stays firm in Asia despite it easing against the majors slightly overnight. The bullish technical signal of the daily Bollinger uptrend channel - triggered a week ago - continues to guide USD/KRW higher toward the 1,150 round-figure trading barrier. The main driver for the greenback is the increasing likelihood of a U.S. interest rate increase in September. U.S. Federal Reserve officials have been turning more hawkish recently; Fed chief Janet Yellen's monetary policy report due later today could affirm this belief and power the greenback even higher. Dow Jones technical analysis suggests immediate support is at 1,140 (round-figure trading barrier), then at 1,132 (base of daily Bollinger uptrend channel), before 1,130 (round-figure trading barrier). Immediate resistance is at 1,144 (top of daily Bollinger uptrend channel), then at 1,150 (round-figure trading barrier), before 1,160 (round-figure trading barrier).
USD/SGD--uptrend. USD/SGD is currently supported above the round-figure trading barrier of 1.3600 and is on track toward 1.3692 - where the weekly Bollinger uptrend channel begins. Bullishness for the U.S. dollar is unlikely to abate before the Federal Reserve chief's monetary policy report due later today. Janet Yellen's testimony could affirm expectations for a U.S. interest rate increase in September - which would be positive for the U.S. dollar. A higher cost of borrowing U.S. dollars could prompt investors to liquidate carry-trade positions that capitalize on zero-cost funding for U.S. dollars to buy higher-yielding assets in emerging markets. A day after Singapore's economy was revealed to be growing at a slower pace than expected, China will release its second-quarter GDP data as well as industrial output numbers. Disappointing data from China today could add to the gloomy outlook for Singapore's economy. Dow Jones technical analysis shows immediate support is at 1.3600 (round-figure trading barrier), then at 1.3547 (base of daily Bollinger uptrend channel), before 1.3500 (round-figure trading barrier). Immediate resistance is at 1.3650 (psychological resistance), then at 1.3692 (weekly Bollinger uptrend channel), before 1.3700 (round-figure trading barrier).
USD/MYR--uptrend. USD/MYR is propped up by technical support at 3.8020 - the base of the daily Bollinger uptrend channel - but may struggle to rise much due to speculation of central bank intervention preventing excessive ringgit depreciation. The U.S. dollar may get a fresh boost later today when U.S. Federal Reserve chief Janet Yellen testifies on monetary policy - if she strikes a hawkish tone, the market will read it as a sign that U.S. interest rates will rise by September. The Iran nuclear deal, which could unlock even more crude oil supply due to the lifting of sanctions against Iran, could be detrimental to oil prices and thereby 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, depending on how soon Iran gets its dormant oil fields running again. Dow Jones technical analysis suggests immediate support is at 3.8020 (base of daily Bollinger uptrend channel), then at 3.8000 (round-figure trading barrier), then at 3.7800 (psychological support), before 3.7730 (20-day Bollinger mid support). Immediate resistance is at 3.8320 (top of daily Bollinger uptrend channel), before 3.8500 (psychological resistance).
USD/THB--uptrend. USD/THB remains biased higher now that it has rallied past the 34.00 round-figure trading barrier. The trajectory of the Bollinger uptrend channel - which was activated more than a week ago - is steepening as bullishness for the U.S. dollar gains traction. USD/THB could soon reach the 34.40 top of the weekly Bollinger uptrend channel. Investors are gearing up for higher U.S. interest rates as soon as September. U.S. Federal Reserve chief Janet Yellen's report on monetary policy due later today could affirm expectations that an interest rate increase is coming, now that the Greek situation in the eurozone appears to be stabilizing. Dow Jones technical analysis suggests immediate support is at 34.00 (round-figure trading barrier), then at 33.96 (base of daily Bollinger uptrend channel), before 33.83 (20-day Bollinger mid support). Immediate resistance is at 34.08 (top of daily Bollinger uptrend channel), then at 34.20 (psychological resistance), before 34.40 (top of weekly Bollinger uptrend channel).
USD/PHP--uptrend. USD/PHP is inside the daily Bollinger uptrend channel and thus likely to keep rising in the short term. The U.S. dollar is well-bid across the board as investors begin to bet on a more hawkish U.S. Federal Reserve. The Philippine central bank said on Tuesday that it expects the peso to weaken along with other Asian currencies due to U.S. rate increase expectations. Fed chief Janet Yellen could affirm the market's belief that interest rates will rise as soon as September in her testimony on monetary policy later today. Traders will be keeping an eye on the yield of the benchmark U.S. 10-year Treasury for indications that others in the market are pricing in a sooner rate hike. The 10-year yield closed Tuesday at 2.40%, slightly down due to disappointing U.S. retail sales released overnight. Dow Jones technical analysis suggests immediate support is 45.18 (base of daily Bollinger uptrend channel), then at 45.13 (20-day Bollinger mid support), before 45.05 (daily Bollinger downtrend channel). Immediate resistance is likely at 45.24 (top of daily Bollinger uptrend channel), before 45.35 (top of weekly Bollinger uptrend channel).
USD/IDR--consolidation. USD/IDR is currently stuck in a no-man's land between 13,300-13,350 which are the respective entrances of the daily Bollinger downtrend and uptrend channel. The pair needs to break out of this range in order to gain technical momentum. But there are conflicting factors ahead that might keep USD/IDR locked in consolidation for now. While traders are generally bullish on the U.S. dollar due to growing U.S. rate-increase expectations, the Iran nuclear deal that has been announced is likely to keep crude oil prices depressed, 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. If oil prices drop further, the outlook for Indonesia's current account balance will improve and this would boost the rupiah. 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), then at 13,270 (base of daily Bollinger downtrend channel), before 13,220 (daily Ichimoku Cloud support zone). 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 14, 2015 21:09 ET (01:09 GMT)
USD/INR--consolidation lower. USD/INR slipped late Tuesday on news of Iran's nuclear deal - which has a negative impact on crude oil prices. The deal lifted trade sanctions on Iran and thus allows its oil to be exported worldwide. This ought to keep oil cheap in the medium to long term, which is beneficial for India's current account deficit. India has in the recent past been criticized for running a large current account deficit - mainly due to its reliance on expensive imported energy - which dampened investor confidence and in turn depressed the rupee. Hence if the Iran deal makes oil cheaper for the long run, the rupee ought to rally as India's trade balance improves. But obstructing USD/INR downside is the increasing likelihood of a U.S. interest rate increase, possibly as soon as September. If U.S. Federal Reserve chief Janet Yellen reveals a hawkish tone at her monetary policy testimony later today, the greenback may rally broadly. Dow Jones technical analysis suggests immediate support is at 63.33 (daily Bollinger downtrend channel), then at 63.21 (base of daily Bollinger downtrend channel), before 63.15 (base of daily Ichimoku Cloud support). Immediate resistance is likely at 63.45 (20-day Bollinger mid resistance), then at 63.57 (daily Bollinger uptrend channel), before 63.69 (top of 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 14, 2015 21:09 ET (01:09 GMT)
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