ASIA FX: Most Firmer USD/Asia Bias, USD/HKD Bucks The Trend
In North East Asia FX, the bias has been for a slightly stronger USD. USD/CNH got to lows of 7.1457, aided by the stronger CNY fixing and the lower USD/CNY spot open onshore, but we have steadily recovered ground since then. The pair was last back above 7.1560. Broader USD sentiment has been supported against the majors, which may reflect month end dynamics. The BBDXY is up close to 0.20%, the DXY +0.25% so far today. China equities continue to rally, the CSI 300 up a further 0.72%.
- Spot USD/KRW has traded with a positive bias, but at 1396, remains sub intra-session highs from Tuesday (1398.45). The BoK policy announcement is tomorrow, but no change is expected.
- USD/TWD is little changed, last near 30.55. Spot USD/HKD has bucked these trends and is tracking under 7.7800 in latest dealings. This appears to reflect further carry trade unwinds. HKD T/N points are approaching flat, while Hibor rates are up noticeably today and over recent weeks.
- In South East Asia, the bias has also been for a stronger USD. USD/IDR is up around 0.30%, last near 16345, while USD/MYR and USD/PHP are both up around 0.20%. This puts USD/MYR back near 4.2300, while USD/PHP is just above 57.20. USD/THB is up more modestly, close to 32.52 in latest dealings.
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GBPUSD TECHS: Key Support Remains Exposed
- RES 4: 1.3789 High Jul 01 and the bull trigger
- RES 3: 1.3689 76.4% retracement of the Jul 1 - 16 bear leg
- RES 2: 1.3627 61.8% retracement of the Jul 1 - 16 bear leg
- RES 1: 1.3589 High Jul 24
- PRICE: 1.3429 @ 06:23 BST Jul 28
- SUP 1: 1.3416/3365 Intraday low / Low Jul 16 and a bear trigger
- SUP 2: 1.3335 Low May 20
- SUP 3: 1.3245 Low May 19
- SUP 4: 1.3144 38.2% retracement of the Jan 13 - Jul 1 bull cycle
GBPUSD continues to trade below last week’s high and remains softer for now. Attention is on the bear trigger at 1.3365, the Jul 16 low. A break of it would confirm a resumption of the downleg that started Jul 1. This would open 1.3335 initially, the May 20 low. Note that a break of 1.3365 would also confirm a breach of the trendline drawn from the Jan 13 low - cancelling a false break scenario. Key short-term resistance is at 1.3589, the Jul 24 high
LOOK AHEAD: UK Timeline of Key Events (Times BST)
| Date | UK | Period | Event |
| 28-Jul | 1100 | Jul | CBI Distributive Trades |
| 29-Jul | 0001 | Jul | BRC Monthly Shop Price Index |
| 29-Jul | 0930 | Jun | BOE Lending to Individuals / M4 |
| 01-Aug | 0930 | Jul | S&P Global Manufacturing PMI (Final) |
| 04-Aug | - | Aug | Bank of England Meeting |
| 05-Aug | 0930 | Jul | S&P Global Services PMI (Final) |
| 05-Aug | 0930 | Jul | S&P Global/CIPS Final Composite PMI |
| 06-Aug | 0930 | Jul | S&P Global/CIPS Construction PMI |
| 07-Aug | 1200 | --- | Bank Of England Interest Rate |
| 07-Aug | 1230 | --- | BOE Press Conference |
| 07-Aug | 1400 | Jul | BOE Decision Maker Panel Data |
| 08-Aug | 1215 | --- | BOE Pill At National MPC Agency Briefing |
| 12-Aug | 0001 | Jul | BRC-KPMG Shop Sales Monitor |
| 12-Aug | 0700 | Jul | Labour Market Survey |
| 14-Aug | 0700 | Q2 / Jun | GDP / Services / Production / Trade / Construction |
BOBL TECHS: (U5) Breaches Support
- RES 4: 118.030 High Jul 22 and a key resistance
- RES 3: 117.698 50-day EMA
- RES 2: 117.623 20-day EMA
- RES 1: 117.350 High Jul 25
- PRICE: 117.140 @ 06:19 BST Jul 25
- SUP 1: 116.970 Low Jul 25
- SUP 2: 116.840 Low Mar 18 (cont)
- SUP 3: 116.800 Low Mar 17 (cont)
- SUP 4: 116.637 76.4% retracement of the Mar 6 - Apr 7 bull leg (cont)
Bobl futures traded in a volatile manner last week and the contract pulled back from its Jul 22 high. The reversal cancels a recent bullish theme and attention turns to key short-term support at 117.200, the Jul 11 low and a bear trigger. The level has been breached, strengthening a bear theme and note too that the 117.000 handle has also been pierced. Sights are on 116.840, the Mar 18 low (cont). Initial firm resistance to watch is 117.623, the 20-day EMA.
