SG SESSION (Rebounded off Bullish Reversal Confirmation)
The Straits Times Index (STI) rebounded during the week, closing with a gain of +1.4% (+39.23 points). The bullish reversal was alerted during last week’s technical outlook. You may refer to the posting over here.
At the current junction, STI is poised to retest its resistance at 2,900 level. The breakout of this level will affirm the strength of its existing rally towards next resistance at 2,965 level.
The levels to watch for further downside is the break of the Doji Star candle low at 2,803 level.
US SESSION (Trending Towards 61.8% Fibonacci Projection)
The S&P500 endured a lacklustre week closing +0.1% (+1.18 points).
At the current junction, S&P 500 is displaying a Bearish Divergence in both Force Index and MACD, against its absolute price movement over the past one month. This indicates a correction is imminent in the fore-coming trading sessions.
For further upside breakout, the Fibonacci projected level is at 2,208. The support to watch for this bullish leg is 2,145 level.
5 things to watch on the economic calendar this week (an extract and summary of investing.com)
1. Fed FOMC Meeting Minutes (Wednesday)
The Fed kept interest rates unchanged following its meeting on July 27 and said near-term risks to the U.S. economic outlook had diminished. However, the central bank stopped short of signaling a near-term rate rise.
Fed funds futures are currently pricing in a 9% chance of a rate hike by September. December odds were at around 45%.
2. U.S. inflation data for June (Tuesday)
Market analysts expect consumer prices to ease up 0.1%, while core inflation is forecast to increase 0.2%.
On a yearly base, core CPI is projected to climb 2.3%. 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. Japan second quarter preliminary GDP (Sunday)
The report is expected to reveal that Japan’s economy expanded by just 0.2% in the April-June period, maintaining pressure on policymakers to support the world’s third largest economy.
4. U.K. CPI, employment & retail sales data (Tuesday)
The U.K. Office for National Statistics will release data on consumer price inflation for July at 08:30GMT, or 4:30AM ET, on Tuesday. Analysts expect consumer prices to rise 0.5%, after increasing 0.5% a month earlier.
At 08:30GMT, or 4:30AM ET, Wednesday, the ONS will publish the July jobs report. Theclaimant count change is expected to rise by 10,000, with the jobless rate holding steady at 4.9%. Wage growth including bonuses is forecast to rise 2.4%.
On Thursday, the ONS will produce a report on July retail sales at 08:30GMT, or 4:30AM ET, with analysts expecting an increase of 0.4%, following a drop of 0.9% in the preceding month.
The Bank of England cut interest rates to a record-low and launched fresh easing measures earlier this month in a bid to buffer the economy from a downturn following the Brexit vote.
Economic activity in the U.K. is expected to slow down sharply in the second half of the year as businesses face uncertainty over the country’s future direction in wake of the U.K.’s vote to exit the European Union.
5. German ZEW business survey (Tuesday)
The ZEW Institute will publish its August German business climate index amid expectations for a rebound to 2.0 from July’s reading of -6.8. The current conditions index is forecast to inch up to 50.0 from 49.8.