USD Firm on Housing Data -- Asia Daily Forex Outlook

 
   


By Trading Central 
 

        SINGAPORE--Following are expected trading ranges and outlooks for nine major currency pairs in Asia today:
        (Ranges are calculated using recent high and lows, information on the placement of option strikes, and technical analysis - Fibonacci levels, trendlines and moving averages.)
        USD/JPY Intraday: Key resistance at 124.6. With the U.S. dollar index currently trading at 96.962, the U.S. dollar held firm overnight thanks to solid U.S. housing data while U.S. stocks edged lower. The U.S. government reported that housing starts increased 0.2% on-month in July to a seasonally adjusted annual rate of 1.21 million, the highest level since October 2007. Meanwhile, the Dow Jones Industrial Average fell 0.2% to 17511.34, the S&P 500 lost 0.3% to 2096.92, and the Nasdaq Composite dropped 0.6% to 5059.35. Crude oil bounced 1.8% to $42.62 a barrel, gold slid 0.1% to $1,117.10 an ounce, while the 10-year Treasury yield climbed to 2.196% from 2.150% a day earlier. Regarding USD/JPY, the pair has narrowed its trading range to between the key resistance at 124.60 and the first downside target at 124.15. It is overlapping with the 20- and 50-period intraday moving averages. At the same time, the intraday RSI is around the neutrality level of 50 and lacking momentum. As long as the key resistance at 124.60 is not surpassed, expect choppy price action with a bearish bias. The second downside target is now set at 124.00 (the low of August 14). Above 124.60, the first alternative upside target is set at 125.00.
        EUR/USD Intraday: Downside prevails. The pair continues its march south and has touched as low as 1.1015 (last seen on August 11). Meanwhile the declining 20- and 50-period intraday MAs maintain a bearish bias, while the intraday RSI remains within the selling area between 50 and 30. The key resistance has been further lowered to 1.1095, while the first downside target is set at 1.0980 (around the base formed in August 11). Only a break above the key resistance at 1.1095 would turn the intraday outlook bullish and call for a bounce toward the first alternative upside target at 1.1125 (the high of August 17).
        AUD/USD Intraday: Bullish bias above 0.7320. The level of 0.7320 proves to be a strong support as the pair posted a rebound once touching it. Meanwhile the pair is trading around the 20-period intraday MA (now at 0.7337) and the intraday RSI is rising to the neutrality level of 50 lacking downward momentum. A bullish bias is maintained. The first upside target is set at 0.7360 and the second at 0.7390 (around the highs of August 17 and 18). Below 0.7320, the first alternative downside target is set at 0.7280.
        NZD/USD Intraday: Bullish above 0.6555. The pair remains supported by an intraday rising trend line, and is likely to post a new rebound to challenge 0.6605 in sight. The intraday RSI is mixed to bullish, while the 20- and 50-period MAs is still in an uptrend. Meanwhile, a strong support base around 0.6555 has formed, which should prevent any downside risk. Therefore, as long as 0.6555 is not broken, upside targets are set at 0.6605 and 0.6625. Alternatively, below 0.6555 look for further downside with 0.6530 and 0.6510 as targets.
        GBP/USD Intraday: Upside prevails. After yesterday's strong rebound, the pair is currently consolidating above its key support at 1.5640. The process of higher highs and lows remains intact, which should clearly confirm a positive outlook on an intraday basis. Moreover, the intraday RSI is bullish above its neutrality level at 50. As long as 1.5640 holds as the key support, look for further advance to 1.5720 and 1.5770 in extension. Alternatively, only the downside breakout of 1.5640 would invalidate our bullish view, and trigger a new pullback to 1.5615 and then to 1.5575.
        USD/CHF Intraday: Key resistance at 0.9800. The pair remains under pressure below the key resistance at 0.9800. Meanwhile, the intraday RSI indicator is lacking upward momentum. In these perspectives, as long as 0.9800 is not surpassed, the risk of the break below the first downside target at 0.9720 remains high. The second downside target is set at 0.9670 (August 12's low). Alternatively, only the upside breakout of 0.9800 would open the path to 0.9860 and even to 0.9905 as possible.
        USD/CAD Intraday: Turning down. The pair is reversing downwards and stays below its key resistance at 1.3085. The 20-period intraday MA has just crossed below its 50-period one, confirming the intraday trend reversal. And the intraday RSI is below 50 lacking upward momentum. The first downside is therefore set at August 14's low at 1.3010. A break below this level would open the way to further weakness towards 1.2985 in extension. Only a break above the key resistance at 1.3085 would call for further upside towards yesterday's high at 1.3125 at first and then to August 17's high at 1.3150 in extension.
        EUR/JPY Intraday: Downside prevail. The pair is capped by its 20-period intraday MA and is looking for a lower bottom. The descending 50-period intraday MA also maintains a bearish bias. And the intraday RSI stays below 50 and is negatively oriented. A first target to the downside is therefore set at the horizontal support and overlap at 136.80. A break below this level would open the way to further weakness towards 136.35 in extension. Only a break above the key resistance at 137.90 would call for further upside towards August 17's high at 138.35 at first and then towards August 14's high at 138.85 in extension.
        EUR/GBP Intraday: Under pressure. The pair is taking a breath and moving sideways below its 50-period intraday MA. The intraday RSI is below 50 and lacks upward momentum. Therefore, even though a continuation of the technical rebound cannot be ruled out, its extent should be limited. A first target to the downside is set at the horizontal support and overlap at 0.7010. A break below this level would open the way to further weakness towards 0.6995 in extension. Only a break above the key resistance at 0.7090 would call for further upside towards yesterday's high at 0.7115 at first and then to 0.7130 in extension.
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        (END) Dow Jones Newswires

        August 18, 2015 21:36 ET (01:36 GMT)