Markets to watch this week

Tariff rollback offers near-term calm

Further tariff rollbacks announced over the weekend has fuelled optimism in Asian markets to start the week, as US President Donald Trump indicates that smartphones, computers, semiconductors, and related equipment will be exempt from reciprocal tariffs. Such news may be welcoming following the recent market dip, though we are still getting mixed signals from the US administration, with regard to new sector-specific tariffs under consideration—particularly targeting semiconductors and pharmaceuticals.

The US dollar continues to trade on a weaker footing, decoupling from its usual relationship with Treasury yields, as the 10-year yield hovers near a three-week high. One theme that ought to be monitored ahead is the economic drag from existing tariffs in the months ahead. While recession risks have eased somewhat amid the latest rollback, growth forecasts for the US in 2025 remain soft, with estimates ranging from just 0.1% to 0.6%. Once the initial optimism around tariff rollbacks fades, there are still the risks that these underlying macro headwinds could bring markets back to a more sobering reality.

US Dollar Index: Breakdown of key psychological 100.00 level

The recent breakdown of the key psychological 100.00 level could be significant, as the US dollar index is back to retest the lower bound of a year-long consolidation range around the 99.60 level. Historically, this support zone has prompted a rebound, but fading the bounce may align with the broader downtrend in place. Further downside may pave the way towards the 96.70 level, where a broader uptrend line support stands. Headwinds for the US dollar include US growth concerns and the unwinding of US assets on trade de-coupling and central banks’ move to support their domestic currencies.

Key levels:

• R2: 102.93
• R1: 100.26
• S1: 96.70
• S2: 93.50

US Dollar Basket chart:

US Tech 100: Downward trendline resistance in view

The key question for the Nasdaq is whether the recent rebound represents a bear market rally—typically sharp and swift in nature, much like this one. While there is some tariff reprieve, the economic drag ahead from existing tariffs ought to be considered. For now, the lower highs and lower lows structure remain intact, with a downward trendline resistance in view. Greater conviction for buyers may come from a move above 10 April high and a break of the trendline resistance. Its daily relative strength index (RSI) has also returned to its midline for now, with a move above the midline needed to offer further bullish bias.

Key levels:

• R2: 19,830
• R1: 19,224
• S1: 18,300
• S2: 17,650

US Tech 100 chart:

Spot Silver: Relief rally face resistance confluence

Silver has surged 14% over the past week, but now faces a key resistance zone near US$32.55—a confluence of the lower channel trendline and the 61.8% Fibonacci retracement. If this rebound proves to be a dead cat bounce, the downtrend could resume from here. The daily RSI is also retesting its midline, potentially signalling renewed selling pressure. On the fundamental side, silver’s economic sensitivity may limit its appeal as a safe-haven asset.

Key levels:

• R2: 34.00
• R1: 32.55
• S1: 3,000
• S2: 2,840

Spot Silver chart:

Singapore Blue Chip: Breakdown of 200-day MA retains bearish bias

Although the index briefly rebounded to test its 200-day moving average (MA), the recovery was swiftly faded by traders, reinforcing the broader bearish outlook. Notably, the weekly RSI has slipped below its midline for the first time since March 2024, underscoring waning momentum. A decisive reclaim of the 200-day MA would be needed to support a more sustained bullish shift—something yet to materialise. Downside risks stemming from US tariffs and the prospect of upcoming Federal Reserve (Fed) rate cuts continue to weigh on sentiment across its constituents.

Key levels:

• R2: 382.55
• R1: 368.00
• S1: 346.42
• S2: 330.90

Singapore Blue Chip chart:

SGD/JPY: Head-and-shoulder pattern faces key test

The weekly chart of SGD/JPY appears to be forming a potential head-and-shoulders pattern, with buyers recently stepping in to defend the neckline around the 108.18 level. If last week’s low fails to hold, this could confirm the bearish setup, with the pattern projecting a medium-term downside target at the 96.41 level. Policy divergence may serve as potential headwind for the pair: the Monetary Authority of Singapore (MAS) has eased policy for a second straight meeting, while inflationary and wage pressures could keep the Bank of Japan (BoJ) on a path toward policy normalisation.

Key levels:

• R2: 116.31
• R1: 110.60
• S1: 106.17
• S2: 101.80

SGD/JPY chart: