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31 Jul 2014
USD/Asia: Retracements are selling opportunities - JPMorgan
FXStreet (Bali) - Niall O'Connor, FX Strategist at JPMorgan, notes that short term retracements are selling opportunities in USD/Asia.
Key Quotes
"The recent decline for USD/Asia suggests a growing risk that a more sustained downtrend is developing."
"While some near term pause cannot be ruled out given the test of the next key support levels, corrective retracements are viewed as opportunities to establish; or add to short positions."
"In line with the next key levels, note the ADXY is approaching significant resistance in the 116.65 area and range highs going to back to November '13."
"The key highlight over the past week has been the breakdown in USD/THB below the key 32.00/10 support zone and medium term range lows."
"While the 31.75/70 area (61.8% retrace) can allow for some pause, the 32.00/10 breakdown area should now act as key resistance and maintain the short term downside risks."
"In turn, a closer test, if not break of the 31.40/45 zone (76.4% retrace) seems likely."
"Similarly, USD/SGD is attempting to retrace from the critical 1.2340 Oct '13 low, but the overall downside risks remain intact."
"We are also closely monitoring the setup for USD/PHP as the decline approaches critical support in the 43.00/42.88 area (Sept/Oct ’13 lows). Still, the medium term risks suggest a deeper extension can develop beyond any short term corrective phase."
Key Quotes
"The recent decline for USD/Asia suggests a growing risk that a more sustained downtrend is developing."
"While some near term pause cannot be ruled out given the test of the next key support levels, corrective retracements are viewed as opportunities to establish; or add to short positions."
"In line with the next key levels, note the ADXY is approaching significant resistance in the 116.65 area and range highs going to back to November '13."
"The key highlight over the past week has been the breakdown in USD/THB below the key 32.00/10 support zone and medium term range lows."
"While the 31.75/70 area (61.8% retrace) can allow for some pause, the 32.00/10 breakdown area should now act as key resistance and maintain the short term downside risks."
"In turn, a closer test, if not break of the 31.40/45 zone (76.4% retrace) seems likely."
"Similarly, USD/SGD is attempting to retrace from the critical 1.2340 Oct '13 low, but the overall downside risks remain intact."
"We are also closely monitoring the setup for USD/PHP as the decline approaches critical support in the 43.00/42.88 area (Sept/Oct ’13 lows). Still, the medium term risks suggest a deeper extension can develop beyond any short term corrective phase."