By Trading CentralSINGAPORE--Following are expected trading ranges and outlooks for nine major currency pairs in Asia today:
Immediate Range Larger Range
USD/JPY 103.75-104.50 103.50-104.85
EUR/USD 1.0855-1.0915 1.0830-1.0950
AUD/USD 0.7580-0.7650 0.7550-0.7675
NZD/USD 0.7095-0.7175 0.7075-0.7205
GBP/USD 1.2175-1.2255 1.2145-1.2285
USD/CHF 0.9915-0.9970 0.9895-1.0000
USD/CAD 1.3255-1.3425 1.3215-1.3470
EUR/JPY 112.80-113.90 112.55-114.15
EUR/GBP 0.8880-0.8925 0.8850-0.8955
(Ranges are calculated using recent high and lows, information on the placement of option strikes, and technical analysis - Fibonacci levels, trendlines and moving averages.) On Monday, U.S. stocks posted gains as investor sentiment was boosted by strong corporate earnings and a wave of corporate mergers and acquisitions. Technology shares were market leaders. The Dow Jones Industrial Average climbed 77 points (+0.4%) to 18,223, the S&P 500 added 10 points (+0.5%) to 2,151, while the Nasdaq Composite was up 52 points (+1.0%) to 5,309.
AT&T fell 1.7% and Time Warner was down 3.1% as investors doubted if their combination would be approved by regulators. Meanwhile, T-Mobile US jumped 9.5% to $51.19, the highest level since August 2007, after the company raised its full-year earnings forecast.
Rockwell Collins shed 6.2% after announcing that it would purchase B/E Aerospace, which surged 16.4%, for $6.4 billion plus the assumption of $1.9 billion in debt.
European stocks were mixed with the STOXX Europe 600 being little changed at close. Philips climbed 4.4% after reporting that third-quarter profit increased 14% on year. Banca Monte dei Paschi di Siena soared 28.3% as investors awaited a new business plan from the Bank's chief executive. Germany's DAX rose 0.5%, the U.K.'s FTSE 100 declined 0.5% and France's CAC was up 0.4%.
U.S. government bonds saw renewed selling pressure as the benchmark 10-year U.S. Treasury yield fell to 1.763% from 1.740% Friday.
Oil prices were under pressure on reports that Britain will soon restart its Buzzard oilfield in the North Sea and that Iraq requested exemption from OPEC production cuts. Nymex crude declined 0.7% to $50.52 a barrel.
Gold edged down to $1,264 an ounce (day-low at $1,260) from $1,265 Monday, while silver increased 0.5% to $17.56 an ounce (day-high at $17.88).
The U.S. dollar remained firm with no weakness in sight as expectations of the Federal Reserve raising interest rates in December grew. In fact, St. Louis Federal Reserve President James Bullard pointed out that an interest rate in December is most likely. Also, Chicago Federal Reserve President Charles Evans said the central bank could up rates three times by the end of 2017.
The ICE U.S. Dollar Index inched 0.1% higher to 98.756, a fresh high since February.
The euro failed to cross above the 1.0900 level to the U.S. dollar and closed little changed at 1.0880.
The British pound marked a session-low of 1.2182 against the U.S. dollar but managed to settle at 1.2235, a hair up from 1.2233 in the previous session. Traders are watching closely Britain's GDP report to be released on Thursday, which will be the first reading of how the broad economy has performed since the Brexit vote in June.
Meanwhile, USD/JPY re-held the 104.00 handle as it gained 0.4% to 104.17. The pair appears to benefit from a plenty supply of upward momentum.
Trading in the Canadian dollar was rather choppy. USD/CAD chalked a fresh seven-month high at 1.3397, but swiftly reversed course to the downside after Bank of Canada Governor Stephen Poloz commented that the decision on whether to cut rates further is not one to take lightly. The pair ended the session at 1.3285, down 0.4% on day. However, this morning, it rebounded up to 1.3363.
AUD/USD rebounded 0.1% to 0.7609 overnight snapping a two-day losing streak, while NZD/USD dropped a further 0.4% posting the third straight losing day.
USD/JPY Intraday: Further advance. The pair is trading above its rising 20-period and 50-period moving averages, which are playing support roles and maintain the upside bias. The relative strength index is above its neutrality level at 50 and lacks downward momentum. Additionally, 103.75 is playing a key support role, which should limit the downside potential. As long as 103.75 is support, look for a further upside toward 104.50 and 104.85 in extension. Below 103.75, look for further downside with 103.50 and 103.15 as targets.
EUR/USD Intraday: The downside prevails. The pair broke below its 20-period and 50-period moving averages, which act as resistance roles now. Meanwhile, the 20-period moving average crossed below the 50-period one, which is negative. The relative strength index is below its neutrality level at 50 and lacks upward momentum. Additionally, 1.0915 is playing a key resistance role, which should limit the upside potential. As long as 1.0915 holds on the upside, look for a further drop toward 1.0855 and 1.0830 in extension. Above 1.0915, look for further upside with 1.0950 and 1.0985 as targets.
AUD/USD Intraday: Towards 0.7580. The pair stays below its key resistance at 0.7650, and remains under pressure. At the same time, the relative strength index is below its neutrality area at 50 and lacks upward momentum. In conclusion, as long as 0.7650 is not surpassed, a break below 0.7580 is likely. Alternatively, above 0.7650, look for further upside with 0.7675 and 0.7700 as targets.
NZD/USD Intraday: The downside prevails. The technical picture of the pair is bearish below its declining 20-period and 50-period moving averages, which act as resistance roles and maintain the downside bias. The relative strength index is below its neutrality level at 50 and lacks upward momentum. Additionally, the 0.7175 represents a significant key resistance level, which should limit the upside potential. As long as the key level at 0.7175 holds on the upside, look for a further drop toward 0.7095 and 0.7075 in extension. Above 0.7175, look for further upside with 0.7205 and 0.7230 as targets.
GBP/USD Intraday: Key resistance at 1.2255. The pair is trading around its 20-period and 50-period moving averages, which are flat and do not show any clear directions. The relative strength index is around its neutrality level at 50. Nevertheless, 1.2255 is playing a key resistance role, which should limit the upside potential. As long as this key level is not broken, we keep our negative view unchanged with down target at 1.2175. A break below this level would call for a further drop toward 1.2145. Above 1.2255, look for further upside with 1.2285 and 1.2320 as targets.
USD/CHF Intraday: Rebound. The pair is trading above its 20-period and 50-period moving averages, while the 20-period moving average is turning up. The relative strength index is above its neutrality level at 50 and lacks downward momentum. Additionally, 0.9915 is playing a key support role, which should limit the downside potential. As long as this key level is not broken, look for a further upside toward 0.9970. A break above this level would call for a further advance toward 1.0000. Below 0.9915, look for further downside with 0.9895 and 0.9870 as targets.
USD/CAD Intraday: Choppy. The pair is posting a pullback and is consolidating around its 20-period and 50-period moving averages. Meanwhile, the 20-period moving average still stays above the 50-period one, and the relative strength index lacks downward momentum. Therefore, as long as 1.3255 is not broken below, further bounce is expected with 1.3425 and 1.3470 as the next targets. Only a break below 1.3255 will call for further drop to 1.3215 and 1.3175 in extension.
EUR/JPY Intraday: Further upside. The pair is reversing up and stays above its 50-period moving average. Meanwhile, the 20-period moving average has also crossed above the 50-period one, and the relative strength index is above 50. As long as 112.80 is not broken down, further bounce is preferred with 113.90 and 114.15 as targets. Alternatively, if the pair breaks below 112.80, a drop toward 112.55 and 112.20 is likely.
EUR/GBP Intraday: Watch 0.8880. The pair remains under pressure below its horizontal resistance at 0.8925, and has been capped by the 20-period and 50-period moving averages. Meanwhile, the relative strength index is still below 50. As long as 0.8925 holds as the key resistance, the risk of a break below 0.8880 remains high. Alternatively, a break above 0.8925 would call for a rise toward 0.8955 and 0.8980 in extension.
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(END) Dow Jones Newswires
