SG SESSION (Bearish Wedge Formation Breakdown Still In Play, Sitting on Window Support Range)
The Straits Times Index (STI) is finding stabilization over the earlier two weeks of losses, with a minimal volatility of +0.2% (+4.1 points) during the week. As STI is still playing out its Bearish Wedge formation breakdown, there are bullish signals indicating a more favourable directional movement towards the upside for the coming week. STI is currently sitting at its immediate support (window support) at 2715 – 2680 range, with friday closing on a Bullish Reversal Candlestick Pattern (Bullish Doji Star). RSI Oscillators is currently at extremely oversold level of 15%, and MACD Histogram displaying a Bullish Divergence signal against its absolute price.
The levels to watch for the week are 2,780 support turned resistance level, and support to watch is the window support at 2,715 – 2,680 level.
US SESSION (S&P 500 at Critical Support Level, Potential Downtrend Formation Ahead)
The S&P500 retraces a further -0.5% (-10.53 points) during the week, posting its first 3 week losing streak since January 2016.
At the current junction, S&P 500 is looking to test its support level at 2,038. The violation of this support level will affirm the establishment of a short term downtrend channel (as plotted in the chart above) for further downside pressure.
The resistance level to watch is 2,085 level, negation of any downtrend channel establishment at this moment.
5 things to watch on the economic calendar this week (an extract from http://www.investing.com/news/economy-news/5-things-to-watch-on-the-economic-calendar-this-week-402073)
1. FOMC meeting minutes (Wednesday)
Investors will be focusing on minutes of the Federal Reserve’s April policy meeting for some clarity on where the U.S. central bank stands on its path toward rate hikes.
The Fed left interest rates unchanged following its meeting on April 27 and issued a statement implying it was in no hurry to raise rates.
The U.S. central bank has previously projected it plans to raise interest rates two more times before the end of the year, while market players expect just one more hike, most likely in December.
2. U.S. inflation data (Tuesday)
On a yearly base, core CPI is projected to climb 2.1%. Core prices are viewed by the Federal Reserve as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories. The central bank usually tries to aim for 2% core inflation or less.
Rising inflation would be a catalyst to push the Fed toward raising interest rates.
3. U.K. CPI, employment & retail sales data (Tuesday)
At 08:30GMT, or 4:30AM ET, Wednesday, the ONS will publish the April jobs report. The amount of people receiving jobless benefits is expected to rise by 4,000 in April, with the jobless rate holding steady at 5.1%, while wage growth including bonuses is forecast to rise 1.7%.
On Thursday, the ONS will produce a report on April retail sales at 08:30GMT, or 4:30AM ET, which will offer further clues on the strength of the economy and the timing of a rate hike by the Bank of England.
Expectations for a rate hike by the BOE have been recently pushed back to early-2017 due uncertainty over a June referendum on whether or not Britain should stay in the European Union.
4. Japan first quarter preliminary GDP (Tuesday)
The report is expected to reveal that Japan’s economy expanded by just 0.1% in the first three months of this year, maintaining pressure on policymakers to support the world’s third largest economy.
5. RBA monetary policy meeting minutes (Tuesday)
The RBA surprised markets earlier this month by cutting its benchmark interest rate by 25 basis points to a record low 1.75%, the first easing in a year, as it seeks to restrain a rising currency and stave off the creeping curse of deflation.