Markets to watch this week
What to watch for US Dollar Index, Spot Gold, Hang Seng Index, USD/SGD, and the Singapore Blue Chip Index.
US Dollar Index: US non-farm payrolls in focus this week
Following a corrective move lower, fresh tariff talks by US President-Elect Donald Trump has reignited traction for the US dollar to start the new week. Its daily relative strength index (RSI) is now back at its mid-line, which may call for some defending from buyers to maintain the broader upward bias. The US non-farm payrolls data will be on watch this week. With market expectations leaning towards a December Federal Reserve (Fed) cut, it may have to take a significant upside surprise in the job data to alter such views. A less-dovish Fed and tariff talks will have to be balanced with weaker US dollar seasonality and uncertainty of any real follow-through.
Levels:
R2: 107.80
R1: 105.91
S1: 104.75
S2: 103.81
US Dollar Index chart:
Spot Gold: Potential room to retrace further?
A firmer US dollar to start the week has kept gold prices on the backfoot, with a short-lived bounce last week reflecting feeble upward momentum. Its daily RSI is finding resistance at its mid-line currently, while the recent formation of a lower high in late-November does not offer much reassurances for buyers. Fading geopolitical risks, along with potentially less dovish Fed rhetoric ahead, may lean towards further profit-taking for now, following its stellar performance this year.
Levels:
R2: 2,791
R1: 2,685
S1: 2,564
S2: 2,475
Spot Gold chart:
Hang Seng Index (HSI): Path of least resistance remains down
The uncertainties around US tariffs and the lack of a stronger net fiscal injection have remained a key overhang for risk sentiments. Despite stronger-than-expected manufacturing Purchasing Managers' Index (PMI) data to start this week, gains continue to sold into, as reservations over geopolitical risks and the sustainability of economic recovery remain. Trading within the current falling wedge may suggest a continued drift lower as the path of least resistance, with 2016 Trump presidency suggesting that things may get worse before it gets better for China.
Levels:
R2: 20,000
R1: 19,760
S1: 19,063
S2: 18,500
Hang Seng Index (HSI) chart:
USD/SGD: Rising channel to support more upside
Fresh threats of tariffs have kept emerging market currencies under pressure, as any trade restrictions tend to impact these trade-oriented economies more significantly. We may expect a cautious lead-up till Donald Trump’s inauguration in January next year, as markets await more clarity over any concrete follow-through of tariffs. On the technical front, the USD/SGD has been trading within a rising channel pattern since October this year, with recent bounce off its lower trendline support pointing to a higher low in continuation of its prevailing upward trend. Its daily RSI has also found support off its mid-line for now, with buyers likely to set their sight to retest the 1.351 level.
Levels:
R2: 1.367
R1: 1.351
S1: 1.336
S2: 1.327
USD/SGD chart:
Singapore Blue Chip Index: Any dips to leave higher low on watch
The Singapore Blue Chip Index has surged more than 33% since August this year, with economic resilience and strong corporate earnings growth aiding as tailwinds. While the current quiet period saw upward momentum fizzle off somewhat, any dip towards the 360.40 level may offer a buy-the-dip opportunity. This is considering a broad rising channel pattern in place, while its daily RSI may offer a technical reset from previous overbought level.
Levels:
R2: 394.96
R1: 376.33
S1: 360.40
S2: 345.80
Singapore Blue Chip chart:
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