Markets to watch this week

USD/JPY: Resistance confluence at 151.96 level on watch

Over the past weeks, US economic resilience validating a more gradual Federal Reserve (Fed)’s easing and rising odds of a Trump victory in the upcoming US presidential election have kept the US dollar well-supported. The USD/JPY has rebounded more than 6% since its September 2024 low, registering an almost three-month high.

That said, a key resistance might potentially be in the way at the 151.96 level ahead. This is where a previous upward trendline may now serve as resistance to overcome, along with its 200-day moving average (MA) and the upper edge of its daily Ichimoku Cloud. There has been some slowdown in bullish momentum lately as well, revealed in the rolling-over of its daily moving average convergence/divergence (MACD). Any reversal may leave the 146.21 level on watch as near-term support.

Focus will likely revolve around the upcoming Bank of Japan (BoJ) meeting next week. While policy settings are unlikely to change in the upcoming meeting, market expectations are rooting for another rate hike in December. Any indication of upcoming hikes from policymakers is likely to bring some hawkishness back on the table, which may support some near-term strengthening in the yen.

Levels:

R2: 157.78
R1: 151.96

S1: 146.26
S2: 140.53

USD/JPY chart:

NY Sugar No. 11: Bullish flag formation on watch

Weather conditions have been a crucial factor in determining the prices of soft commodities. Since mid-September this year, sugar prices have risen by almost 25%, with markets pricing for potential supply disruptions in the near term as drought conditions in Brazil reduced the country's sugar production prospects.

On the technical front, prices seem to be taking a breather following its recent rally, putting a potential bullish flag formation in place on the daily chart. Greater indication of buyers taking control may be a breakout move above the 22.60 level, which may then support a move towards the November 2023 high based on the flag projection.

Levels:

R2: 23.75
R1: 22.60

S1: 20.67
S2: 19.00

NY Sugar No. 11 chart:

Singapore Blue Chip Index: Higher high keeps broader upward trend intact

The Singapore Blue Chip Index has been resilient, with the sell-off in late-September 2024 proving to be short-lived and limited in scale. The index has now moved to form a higher high at the 350.12 level. The Singapore Exchange (SGX) fund flow data over the past weeks continue to show strong institutional interest, with only one week registering outflows over the past eight weeks.

The broader trend leans on the upside, but some reservations may be the potential bearish divergence on its daily relative strength index (RSI), which may suggest some near-term profit-taking. The 338.69 level may be on watch as a potential support to accumulate, while trading in line with the broader upward trend may leave the 360.14 level as the target level for a retest.

Levels:

R2: 366.72
R1: 360.14

S1: 338.69
S2: 331.17

Singapore Blue Chip Index chart: