USD Yields As Commodities Soar -- Asia Daily Forex Outlook

 
   


Note: This column was prepared before China's central bank moved to devalue its currency Tuesday morning. 
 

        By Trading Central
        HONG KONG--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: Bullish bias above 124.40. Currently trading at 97.204, the US dollar index fell overnight while US stocks were given a boost by surging commodity prices. Crude oil surged 2.5% to $44.96 per barrel, gold was up 0.9% to $1,104 per ounce and copper rose 2.8% to $2.407 per pound. And the S&P500 gained 1.3% to 2,104, while the Dow Jones Industrial Average was up 1.4%, to 17,615. At the same time, the euro jumped to as high as 1.1041 on expectations that Greece and its creditors would reach a bailout agreement. Meanwhile, USD/JPY maintains its bullish bias above the key support at 124.40. The 20-period intraday moving average stays above the 50-period one, while the intraday RSI remains within the buying area between 50 and 70. The first upside target is set at 124.80 (around yesterday's high) and the second at 125.00. If the pair breaks below the key support at 124.40, a further decline toward 124.20 and even 124.05 is expected.
        EUR/USD Intraday: Bias remains bullish. The pair remains on the upside after advancing overnight and is challenging the first upside target at 1.1045 (around yesterday's high). It is supported by a rising 20-period intraday MA. Also, the intraday RSI is well directed within the buying area between 50 and 70. The second upside target is set at 1.1080 (last seen on August 4). Alternatively, below the key support at 1.0980, expect further downside toward 1.0955 and 1.0920 (around yesterday's low).
        AUD/USD Intraday: Further upside. The pair continues its rebound initiated overnight and is challenging the first upside target at 0.7430. It is well supported by the 20-period intraday MA, which has broken above the 50-period one. The intraday RSI is well directed with the buying area between 50 and 70 with a strong upward momentum. The second upside target is set at 0.7450 (last seen on July 21). Only a break below the key support at 0.7380 would turn the intraday outlook bearish and call for a decline toward yesterday's low of 0.7350.
        NZD/USD Intraday: Bullish bias above 0.6585. The pair remains in an up-trend on an intraday basis, supported by its key level at 0.6550. A bullish cross has identified between the 20- and 50-period intraday MAs, which favors a new bounce. Moreover, the intraday RSI stands firmly above its neutrality level at 50. Further advance to challenge 0.6640 (the previous top) seems likely. A second upside target is set at 0.6675. Alternatively, below 0.6585, look for further downside with 0.655 & 0.6525 as targets.
        GBP/USD Intraday: Turning up. The pair managed to break above its previous declining trend line, and is heading upward now. The immediate momentum is strong, as the intraday RSI is challenging its 70 resistance without displaying any reversal signal. Both the rising 20- and 50-period intraday MAs are providing support. In which case, as long as the key support at 1.5510 is not broken, expect a new rise toward 1.5635 and 1.5670 in extension. Alternatively, below 1.5510 look for further downside with 1.5455 & 1.5420 as targets.
        USD/CHF Intraday: Upside prevails. Currently trading at 0.9835, the pair remains steadily on the upside. A support base at 0.979 has formed and has allowed for a temporary stabilisation. Besides, the technical indicator such as the intraday RSI favors a new rebound. As long as 0.9790 holds as the key support, the pair seems likely to challenge 0.9890 (its previous swing high) at first. Alternative scenario, below 0.9790 look for further downside with 0.9755 & 0.9715 as targets.
        USD/CAD Intraday: Downside prevails. The pair has accelerated to the downside after breaking below its previous support at 1.3100, which should now play a key resistance role. Both descending 20-period and 50-period intraday MAs maintain a bearish bias. And the intraday RSI is below 50 and lacks upward momentum. The first downside target is set at 1.2980. A break below this level would open the way to further weakness toward 1.2960. However, a break above the key resistance at 1.3100 would call for further upside toward 1.3150 at first and then to yesterday's high at 1.3180 in extension.
        EUR/JPY Intraday: Upside prevails. The pair has accelerated to the upside after breaking above its previous resistance at 136.56 which should now play a key support role. Both rising 20-period and 50-period intraday MAs maintain a bullish bias. And the intraday RSI is well directed. Further upside is therefore expected with the next horizontal resistance and overlap set 137.59 at first. A break above this level would call for further advance toward 137.81. Only a break below the horizontal support at 136.56 would open the way to further weakness towards 136.33 at first. A second alternative downside target is set at the horizontal support and overlap at 136.05.
        EUR/GBP Intraday: Bias remains bullish. The pair stays above its key support at 0.7045 and is moving sideways around its 20-period and 50-period intraday MAs. The intraday RSI is around 50 and lacks momentum. Thus, even though a continuation of the consolidation cannot be ruled out, its extent should be limited. Further upside is therefore expected with the next horizontal resistance and overlap set at 0.7100 at first. A break above this level would call for further advance towards 0.7115. Only a break below the horizontal support at 0.7045 would open the way to further weakness towards Aug 7 low at 0.7015 at first. A second alternative target is set at 0.7000.
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        (END) Dow Jones Newswires

        August 10, 2015 22:12 ET (02:12 GMT)