Won, Singapore dollar break resistance

Most emerging Asian currencies rose on Thursday as Europe's plan to ease its debt crisis boosted riskier assets, while the South Korean won and Singapore dollar breached resistance lines, indicating possible further gains in the near term. "Near term risks for the regional pairs (dollar/Asian currencies) would be tilted to the downside. We would look to the higher beta currencies like the SGD, MYR, KRW for example," said Emmanuel Ng, FX strategist at OCBC in Singapore.
Ahead of the pivotal Europe summit that ended Thursday, most emerging Asian currencies were already higher for the week on optimism that European leader would come up with detailed measures to contain the eurozone's debt crisis. "The market has priced in quite a bit of good news coming from the summit. It will start discounting," said a European bank dealer in Singapore. "From this angle, I would rather be buying dollar/Asia on dips than selling on rallies." Dollar/won slid 1.5 percent during the local trade, the biggest percentage fall since late September, on exporters' month-end supplies and as speculators cleared long positions.
The pair broke through 1,128.6, the 50 percent Fibonacci retracement of its rise between August and October, and also 1,120.5, a 55-day moving average. The pair may fall more, probably to 1,109.8, the 61.8 percent retracement, which may be stronger support. "It's time to sell dollar/Asia including dollar/won. But I doubt if dollar/won will slide much more," says a foreign bank dealer in Seoul.
US dollar/Singapore dollar fell as funds and leveraged names added to selling pressure due to improved risk sentiment. The Singapore central bank's comments on a slowdown in growth due to knock-on effects of the deteriorating external environment had no negative impact on the Singapore dollar.
The pair broke through a 55-week moving average of 1.2605 and the 50 percent retracement at 1.2597 of its rise between late July and early October The Singapore dollar may head to 1.2500 if the US dollar ends the day lower than the retracement and the average. Dollar/peso broke through the 50 percent retracement at 43.065 of its rise between August and October and a 100-day moving average of 42.985. The pair is seen heading to 42.790, the 61.8 percent retracement if it ends the day below the 50 percent lines and that average. Dollar/ringgit extended falls on sentiment and corporate sales although overall volume traded was not large.