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ASIA FX: NEA USD/Asia Pairs Pushing Through 20-day EMA Resistance

ASIA FX
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North East Asia spot markets have generally seen USD buying today. A good chunk of this is catch up to USD strength over recent sessions, with both South Korean and Taiwan markets returning from holidays. USD/CNH has also risen, with the pair moving past the 20-day EMA resistance point. 

  • CNH weakness comes despite a generally positive Hong Kong and China related equity tone to end the week. Broader USD trends after a bit softer, particularly in terms of lower USD/JPY levels. However, these factors aren't aiding CNH much at this stage. The 1 month USD/CNH risk reversal has pushed noticeably higher in recent sessions, last near 0.15, fresh highs back to early May of this year. See the chart below, which is overlaid with USD/CNH spot. One factor that may be weighing on CNH is concern around the extent to which recent equity gains will be sustained. The other factor is the proximity to the US election, which will be held on Nov 5, so in just under a month.
  • Spot USD/KRW has rebounded 0.80%, putting the pair above 1334. We are above the 20-day EMA resistance point, while second half of Sep highs near 1340 may be the next topside target. This looks to be largely catch up to USD strength when onshore markets were out, as the 1 month NDF is little changed near 1332, versus end NY levels from Thursday. Local equities are up +0.30% for the Kospi, with offshore investor flows +$100mn so far today.
  • Spot TWD is 0.50% weaker on returning onshore markets. This leaves USD/TWD back near 32.00, which is also above the 20-day EMA resistance point. Earlier Sep highs rest back above 32.20. 
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North East Asia spot markets have generally seen USD buying today. A good chunk of this is catch up to USD strength over recent sessions, with both South Korean and Taiwan markets returning from holidays. USD/CNH has also risen, with the pair moving past the 20-day EMA resistance point. 

  • CNH weakness comes despite a generally positive Hong Kong and China related equity tone to end the week. Broader USD trends after a bit softer, particularly in terms of lower USD/JPY levels. However, these factors aren't aiding CNH much at this stage. The 1 month USD/CNH risk reversal has pushed noticeably higher in recent sessions, last near 0.15, fresh highs back to early May of this year. See the chart below, which is overlaid with USD/CNH spot. One factor that may be weighing on CNH is concern around the extent to which recent equity gains will be sustained. The other factor is the proximity to the US election, which will be held on Nov 5, so in just under a month.
  • Spot USD/KRW has rebounded 0.80%, putting the pair above 1334. We are above the 20-day EMA resistance point, while second half of Sep highs near 1340 may be the next topside target. This looks to be largely catch up to USD strength when onshore markets were out, as the 1 month NDF is little changed near 1332, versus end NY levels from Thursday. Local equities are up +0.30% for the Kospi, with offshore investor flows +$100mn so far today.
  • Spot TWD is 0.50% weaker on returning onshore markets. This leaves USD/TWD back near 32.00, which is also above the 20-day EMA resistance point. Earlier Sep highs rest back above 32.20.