FX Insights. Chart Of The Day USD/JPY: Next significant support at Friday, 29 April 2016

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1 Quek Ser Leang Lee Sue Ann Global Economics & Markets Research URL: Chart Of The Day USD/JPY: Next significant support at USD suffered its largest single day loss since August 2015 when BOJ s inaction sent it plummeting to a low The key level to watch is obviously at /65, the low seen earlier this month. While a break below this level would not be surprising, the sharp and rapid drop from just below appears to be running ahead of itself and any further decline would likely be at a slower pace (note that daily MACD is still in positive territory). That said, the next significant mid-term support is another 200 pips lower at and a clear break below /65 could sent USD accelerating lower. Overall, the outlook for USD for the next couple of weeks has shifted to bearish and only a move back above would indicate that the downward pressure has eased ( is already a strong short-term resistance). 1 P a g e

2 29-Apr-16 Summary of Views FX Pairs Spot Outlook Since/ Rate Target Trailing-Stop Support Resistance USD/SGD Neutral 20 Apr S1: S2: R1: R2: EUR/SGD Neutral 11 Apr S1: S2: R1: R2: GBP/SGD Bullish 25 Apr S1: S2: R1: R2: AUD/SGD Bearish 28 Apr S1: S2: R1: R2: JPY/SGD *Bullish 29 Apr S1: S2: R1: R2: USD/MYR Neutral 08 Apr S1: S2: R1: R2: USD/THB Neutral 22 Apr S1: S2: R1: R2: USD/CNH *Neutral 29 Apr S1: S2: R1: R2: CNH/SGD Neutral 20 Apr S1: S2: R1: R2: EUR/USD Neutral 27 Apr S1: S2: R1: R2: GBP/USD Bullish 26 Mar S1: S2: R1: R2: AUD/USD Bearish 28 Apr S1: S2: R1: R2: NZD/USD Neutral USD/JPY *Bearish * Shift in outlook. 22 Apr Apr S1: S2: S1: S2: R1: R2: R1: R2: FX Pairs Ranges for 28-Apr-16 Performance* Open High Low Close 1-day 1-week 1-month YTD** USD/SGD % -0.34% -0.70% -5.12% EUR/SGD % +0.28% -0.10% -0.98% GBP/SGD % +1.70% +0.92% -6.00% AUD/SGD % -1.72% -0.64% -0.58% JPY/SGD % +0.92% +3.53% +5.53% USD/MYR % +0.05% -2.64% -9.32% USD/THB % -0.22% -0.93% -2.94% USD/CNH % -0.06% -0.11% -1.23% EUR/USD % +0.57% +0.54% +4.40% GBP/USD % +1.96% +1.56% -0.83% AUD/USD % -1.47% -0.11% +4.68% NZD/USD % +0.70% +1.62% +1.93% USD/JPY % -1.24% -4.08% -10.1% * Percentage difference between the closing price and the last price 1-period ago. ** Percentage difference between the closing price and the last price on 31-Dec P a g e

USD/SGD: 1.3450 USD moved below the 1.3440 support (low of 1.3416) before rebounding quickly to end the day at 1.3451.

3 USD/SGD: USD moved below the support (low of ) before rebounding quickly to end the day at While the undertone still appears weak, downward momentum is far from impulsive and a sustained move below appears unlikely for now. From here, allow for a rebound to but is expected to cap for a move lower to /05. Neutral: Daily close below would shift outlook to bearish. As mentioned in recent updates, downward momentum is improving and from here, a daily closing below would shift the outlook for USD to bearish. This appears to be a likely scenario unless this pair can move and stay above within the next 1 to 2 days. 3 P a g e

4 EUR/SGD: EUR is starting off the day at the same level as yesterday after trading within a narrow / range. Neutral indicators continue to suggest further range trading, albeit likely at a slightly higher range of / Neutral: In a broad / range [No change in view, see previous update below] There is not much to add; the outlook for EUR is still viewed as neutral and we continue to expect this pair to trade within a / range for now. GBP/SGD: In line with expectations, GBP moved lower to (low of ) before rebounding quickly. While the recovery could extend higher to , a sustained move above this level is unlikely (next resistance is at , high earlier in the week). The overnight low of /50 is acting as a strong support now ahead of Bullish: To take partial profit at While there is no change to our bullish GBP view (see Chart of the Day update), short-term momentum is showing early signs of slowing and those who are long should look to take partial profit at Stop-loss is still at but in order for GBP to extend its recent strength, any short-term pull-back should ideally stay above /50. AUD/SGD: The actual trading range of / was close to our expected range of / The consolidation phase appears incomplete and further sideway trading is expected for today, likely holding roughly between and Bearish: Down-move to extend lower to We just turned bearish AUD yesterday and there is no change our view. The immediate target is for a move towards , the low seen in early April. Resistance is at but only a move above the stop-loss at would indicate that our bearish expectation is wrong. JPY/SGD: The spectacular rally in JPY yesterday is clearly overbought and while further up-move will not be surprising, any further advance is not expected to move significantly above /05. Support is at ahead of Shift from bearish to bullish: Target While we were aware that the target level was a strong support, the subsequent spectacular rally from a low of was clearly unexpected. The strong and impulsive upward momentum suggests that further JPY strength is likely from here. In other words, the outlook for JPY has shifted from bearish to bullish. Overbought conditions would likely lead to a slower pace of up-move but the target appears achievable (next resistance is at ). Stop-loss is at even though is already a strong support. 4 P a g e

5 USD/MYR: Neutral: Daily close below would shift outlook to bearish. Downward momentum is improving rapidly and a daily closing below the strong support would indicate the start of a bearish phase in USD (target a move to the recent low of ). This appears to be a likely scenario unless this pair can move back above within the next 1 to 2 days. USD/THB: Neutral: Daily close below would shift outlook to bearish. The sudden and rapid pick-up in downward momentum was unexpected. From here, a daily close below would indicate the start of a sustained down-move in USD (towards the recent low of 34.82). This appears likely unless USD can surmount and stay above by end of today. USD/CNH: Shift from bullish to neutral: In a broad / range. USD touched a high of yesterday before dropping rapidly to take out the stop-loss for our bullish view at The sudden pick-up in volatility was unexpected (yesterday s range was the largest for this month) and has resulted in a mixed outlook for this pair. We are neutral now and expect this pair to trade in a broad / range even though the odds are higher for a move to first instead of CNH/SGD: Neutral: In a broad / range. [No change in view, see previous update below] CNH is pressuring the support and a clear break below this would increase the odds for move below the recent low of While the outlook is viewed as neutral, the downward pressure will continue to grow unless CNH can reclaim within the next few days. 5 P a g e

EUR/USD: 1.1360 In line with expectations, EUR retested the 1.1360 resistance (high of 1.1368) before easing off.

6 EUR/USD: In line with expectations, EUR retested the resistance (high of ) before easing off. The upward momentum is not strong but the current underlying EUR strength could lead to a move higher to test the rather crucial resistance at /95 (last week s high). At this stage, the odds for a sustained break above this level are not high. Support is at but only a move back below would indicate that a short-term top is in place. Neutral: Daily close above would target /65 and beyond. As mentioned yesterday, while the outlook for this pair is deemed as neutral (between and ), the odds for a break above are higher than for a break below Upward momentum has improved considerably and a daily closing above would indicate the start of a move to and likely beyond the month-to-date high of /65. Overall, this pair is expected to remain underpinned unless there is a move back below eur= 6 P a g e

GBP/USD: 1.4605 GBP traded sideways as expected, albeit at a higher and narrower range than anticipated.

7 GBP/USD: GBP traded sideways as expected, albeit at a higher and narrower range than anticipated. While the short-term outlook has improved, any further GBP strength is expected to struggle to move beyond the major resistance. The overnight low at is acting as a strong support ahead of Bullish: To take partial profit at The bullish GBP phase that started earlier this week (see Chart of the Day on 26 April when spot was at ) is still clearly intact. However, as mentioned previously, is a strong resistance and those who are long should look to take partial profit here. A clear break above this level would shift the focus towards the year-to-date high of Stop-loss is adjusted higher to from P a g e

AUD/USD: 0.7625 Yesterday s range of 0.7570/0.7659 was close to our expected sideway trading range of 0.7570/0.7655.

8 AUD/USD: Yesterday s range of / was close to our expected sideway trading range of / The sharp drop that started two days has likely made a temporary bottom and the current price action is viewed as part of a consolidation phase (further AUD weakness still likely but only at a later stage). In other words, continue to expect range trading for today, albeit at higher range of / Bearish: Pull-back to extend lower to / We turned bearish AUD yesterday (see Chart of the Day update) and expect the current pull-back to extend lower to test the major / support. As highlighted, in order to maintain the impulsive downward momentum, any short-term rebound should not move back above P a g e

NZD/USD: 0.6960 Against our expectation, NZD extended its gains above 0.6980 (high of 0.6990) before easing off. The current upmove appears to have scope to extend further but 0.

9 NZD/USD: Against our expectation, NZD extended its gains above (high of ) before easing off. The current upmove appears to have scope to extend further but is a very strong resistance and a sustained move above this level appears unlikely. On the downside, only a move back below would indicate that a short-term top is in place. Neutral: In a / range. The upward momentum is more resilient than expected and a break above the top end of our expected / sideway range would not be surprising. That said, the current up-move appears to be running ahead of itself and a move beyond the month s high of appears unlikely at this stage. Overall, this pair is expected to stay firmed in the next few days with solid support at P a g e

USD/JPY: 108.05 While the sharp drop yesterday is extremely over-extended, there are no signs of stabilization just yet.

10 USD/JPY: While the sharp drop yesterday is extremely over-extended, there are no signs of stabilization just yet. However, any further USD decline is likely going to be at a slower pace and even a break below the recent low of /65 is not expected to move significantly below The overnight high of is acting a strong resistance from here (next resistance at ). Shift from bullish to bearish: Next significant support is at [See Chart of the Day on page 1] jpy= 10 P a g e

11 UOB FX & Interest Rate Outlook FX Outlook 2Q16 3Q16 4Q16 1Q17 Rates Outlook 2Q16 3Q16 4Q16 1Q17 EUR/USD EU 0.00% 0.00% 0.00% 0.00% GBP/USD UK 0.50% 0.50% 0.50% 0.75% AUD/USD AU 2.00% 2.00% 2.00% 2.00% NZD/USD NZ 2.00% 2.00% 2.00% 2.00% USD/JPY JP -0.10% -0.20% -0.20% -0.30% USD/SGD SG 1.30% 1.50% 1.65% 1.75% USD/MYR MY 3.25% 3.25% 3.25% 3.25% USD/THB TH 1.50% 1.50% 1.50% 1.75% USD/CNY CN 3.85% 3.85% 3.85% 3.85% USD/IDR 13,000 13,100 13,200 13,300 ID 6.75% 6.75% 6.50% 6.50% USD/PHP PH 4.0% 4.0% 4.0% 4.25% USD/INR IN 6.75% 6.75% 6.75% 6.75% USD/TWD TW 1.38% 1.38% 1.38% 1.38% USD/HKD HK 1.00% 1.00% 1.25% 1.50% USD/KRW KR 1.25% 1.25% 1.25% 1.25% Last updated on 22 Mar 16 US 0.75% 0.75% 1.00% 1.25% Central Bank Meetings 2016 Central Bank Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Federal Reserve (FOMC) European Central Bank (ECB) Bank of England (BOE) Reserve Bank of Australia (RBA) Reserve Bank of New Zealand (RBNZ) Bank of Japan (BOJ) Bank Negara Malaysia (BNM) Bank of Thailand (BOT) Monetary Authority of Singapore (MAS) - 14 TBA - Disclaimer: This analysis is based on information available to the public. Although the information contained herein is believed to be reliable, UOB Group makes no representation as to the accuracy or completeness. Also, opinions and predictions contained herein reflect our opinion as of date of the analysis and are subject to change without notice. UOB Group may have positions in, and may effect transactions in, currencies and financial products mentioned herein. Prior to entering into any proposed transaction, without reliance upon UOB Group or its affiliates, the reader should determine, the economic risks and merits, as well as the legal, tax and accounting characterizations and consequences, of the transaction and that the reader is able to assume these risks. This document and its contents are proprietary information and products of UOB Group and may not be reproduced or otherwise. Singapore Company Reg No Z

FX Insights. Chart Of The Day USD/CNH: Expect deep pull-back towards with lower odds for extension to Friday, 22 July 2016

FX Insights. Chart Of The Day USD/CNH: Expect deep pull-back towards with lower odds for extension to Friday, 22 July 2016 Quek Ser Leang Quek.SerLeang@uobgroup.com Lee Sue Ann Lee.SueAnn@uobgroup.com Global Economics & Markets Research Email: GlobalEcoMktResearch@uobgroup.com URL: www.uob.com.sg/research Chart Of The Day