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WEEKLY MARKET OUTLOOK

21st Sep – 25th Sep 2015

WEEKLY

MARKET

OUTLOOK


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WEEKLY MARKET OUTLOOK: AN OVERVIEW

TECHNICAL INSIGHTS

o EUROSTOXX 50

o EUR/USD

o CHF/USD

o STANDARD & POOR’S 500

o NZD/USD

o CAD/USD

o STRAITS TIMES INDEX

o SGD/USD

o GBP/USD

o NIKKEI 225

o USD/JPY

o AUD/USD

GLOBAL ECONOMICS

o JAPAN IS BACK IN THE DEFLATIONARY ZONE o SINGAPORE INDUSTRIAL PRODUCTION

o U.S. OIL TUMBLED AFTER BUILD IN GASOLINE INVENTORIES

o GERMAN BUSINESS CONFIDENCE BOOST

o

SINGAPORE INDUSTRIAL PRODUCTION







After months of experiencing an upward

trend, the bullish trend turned bearish on

11 September 2015 after breaking

support level at 3666.93.

Downward trend persist, as next support

level at 3483.63 broke.

Sideway trend is observed but continues

to dip after breaking the next support

level at 3155.84.

Next resistance level at 3205.21 and

3282.22. Intermediate support at

3001.82.

Bearish trend is likely to continue into

October as Euro Stoxx 50 dips further.

Toh Kai Yun: Research Analyst (Global Macro)

TECHNICAL INSIGHTS: EUROSTOXX 50







The EURUSD pair initially tried to rally

on Thursday, but found a bit of resistance

near the 1.13 level, ended up forming a

shooting star. It now appears that this

market isn’t ready to do anything for any

real length of time.

The 1.13 level looks to be one that is

difficult to overcome, but if it does, we

can expect the next resistance to be in the

region of 1.145 level which can be good

call for quick traders. At the same time, I

believe the 1.11 level below should be

massively supportive.

In other words, I think we are simply

going to continue to consolidate and

bounce around in this very small area.

Yeo Jian Hui: Research Analyst (Global Macro)

TECHNICAL INSIGHTS: EUR/USD







The CHFUSD pair is currently on a

bearish trend, falling to 1.0208 from

1.048. Although there is a short rally on

Thursday, the pair quickly reversed back

to bearish momentum. As we can see

from the chart, each time the pair attempt

to test a new resistance with small rise, a

stronger downward pull follows.

The shape of the candle certainly doesn’t

look appealing and is so negative

looking. Adding to the fact that there

isn’t any support below, the existing

bearish trend for this currency pair may

well continue.

Yeo Jian Hui: Research Analyst (Global Macro)

TECHNICAL INSIGHTS: CHF/USD







The S&P 500 Index (i.e. US market) is

stuck in a ‘nervous zone’ as the Federal

Reserve held back on raising interest

rates and investors wait for further policy

decisions

Slowdown in China and in many

emerging markets is also causing a

bearish and panicked sentiment by

investors, as seen by a high degree of

volatility in the market, and strong

volumes in either direction

In the one-month horizon, there appears

to be a pennant pattern forming, with a

possible triple bounce off the light-blue

support line drawn

Moving forward, investors should

proceed with caution as the market

continues to be nervous, and the ‘great

bull run’ is called into question

Nicholas Tan: Research Analyst (Global Macro)

TECHNICAL INSIGHTS: STANDARD & POOR’S 500







TECHNICAL INSIGHTS: NZD/USD

Trading earlier in the week resulted in a bearish channel shown by the two black channel lines. Prices respected this channel fairly well. However, multiple bullish divergences were formed throughout this downward movement.

Prices eventually had a sharp breakout from this bearish channel after poking out slightly and consolidating near the upper channel line.

New momentum high was formed on the

MACD corresponding to the red line on the price chart. This foreshadowed future upward momentum.

As shown in the chart, prices later

continued a bullish uptrend after finding some resistance at the Ichimoku cloud.

Prices broke to a new high after a retest

of the previous level of significance at 0.63662

Overall outlook for NZD/USD is bullish

for the next week. Lucas Lee: Research Analyst (Global Macro)







TECHNICAL INSIGHTS: CAD/USD

Trading earlier this week was

characterized by a inconsistent bullish uptrend, with no clear channels or trend lines.

Prices broken up and down Ichimoku clouds of support and resistance without much conviction in overall trend direction.

Over the last few days of trading, prices consolidated very narrowly in a wedge formation.

Overall outlook for CAD/USD is neutral for the next week. However, further breakout directions from the wedge could give hints about direction. Also, higher levels of volatility are to be expected given the long period of consolidation in the chart.

Lucas Lee: Research Analyst (Global Macro)







On July 31st, the STI broke a strong

support zone of 3253-3266 with huge

breakaway gap. With the worldwide

financial turmoil caused by China’s huge

market sell-off and Greek debt crisis the

STI tumbled too, finding a near-term

support around 2810.

A “dead cat bounce” formed in late

August as bottom pickers entered, but

was unable to sustain the rally as the sell-

off continued.

In the weeks of September, price action

is trading narrowly sideways, between

2810 to 2925 points. Huge indecision can

be found, as there were wide intraday

swings and long dojis, particularly this

week as it reaches to test the support.

Selling pressure is still highly present

Tan Zhi Rong: Research Analyst (Global Macro

TECHNICAL INSIGHTS: STRAITS TIMES INDEX







TECHNICAL INSIGHTS: SGD/USD

SGD/USD has recently broken out of a

downtrend on 24/09/15 at 16:30 by

breaking through its resistance line.

Signs of the reversal are showing as

lower highs are no longer being formed

and the newly established support line

has been tested successfully twice.

Resistance area around 0.7036 and

support area around 0.7005 are key

critical prices to note in monitoring the

start of the next trend.

Saw Le Yong: Research Analyst (Global Macro)







At 22th September, 02:30, the GBP/USD

started the day off with a huge sell-off

which lasted for till 24th.

Prices rested and the steady climb out of

the range seemed to have staged a rally

on 24th , in a frantic hour, prices have

sharply dropped and fell signally the

conviction from bulls are not strong

enough.

On 25th, price action broke near term

support and a support-resistance

phenomenon appeared at 1.52004.

Market psychology signals the downside,

as rallies are often engulfed by a huge

down marubozu.

Price expected to trade within range as

MACD upward trend shows that large-

scale selling has dissipated.

Tan Zhi Rong: Research Analyst (Global Macro)

TECHNICAL INSIGHTS: GBP/USD







The Nikkei 225 Index has been in

consolidation for the past month, gains for

the past year have been returned back.

This week’s market closed at 17,880.51 with

a bullish hammer where it shows signs of

trend reversal and might fill up the previous

gap.

Resistance level is currently near

psychological level of 19,000.

Support level is currently at around 17,550

where it has been tested by the market

several times. If it goes below 17,550

markets downtrend might persist.

Timmy Lim: Research Analyst (Global Macro)

TECHNICAL INSIGHTS: NIKKEI 225







USD/JPY is currently on a bullish green

trend channel. Signs of bullish momentum

are showing as higher lows are being formed

along it.

Resistance area around 120.240 and 120.540

are key critical prices to note in monitoring if

these areas experience a role reversal,

becoming support areas instead when prices

were to touch these regions.

Jethro Hee: Research Analyst (Global Macro)

TECHNICAL INSIGHTS: USD/JPY







TECHNICAL INSIGHTS: AUD/USD

AUDUSD has broken out of its red bearish

channel and is now showing signs of

temporary bullish momentum around the

38.2% Fibonacci retracement level.

Risk of downside is still high and can be

confirmed by a break below the major

psychological support level of 0.70000.

On the other hand, a break above 0.70400

resistance level might mean that further

upside momentum is likely.

Khong Zhan Qing: Research Analyst (Global

Macro)







GLOBAL ECONOMICS: JAPAN IS BACK IN THE DEFLATIONARY ZONE

Japan’s core inflation (which includes oil and

excludes volatile fresh foods) falls by 0.1% in

August 2015 YoY due to weak oil prices.

Current rates are far away from their target of 2%

despite efforts by the BoJ in quantitative easing.

Increased efforts of QE might be seen to boost

domestic markets in order to achieve 2%

inflation target.

Timmy Lim: Research Analyst (Global Macro)







In Singapore, industrial production measures the

manufacturing output of the economy.

The latest report reveals that industrial

production in Singapore dropped by 7.0 percent

year-on-year in August of 2015, below the -5.3%

forecast of economists.

Being an economy heavily reliant on the external

environment, Singapore has been hit by the

slowing growth in China and uncertainty caused

by the potential hike in USA interest rates.

A decrease in manufacturing, which makes up

1/5 of the Singaporean economy, increases the

likelihood of a technical recession and a change

in exchange rate.

Saw Le Yong: Research Analyst (Global Macro)

GLOBAL ECONOMICS: SINGAPORE INDUSTRIAL PRODUCTION







U.S. crude oil for delivery in November

pushed higher initially after the weekly U.S.

Energy Information Administration data showed

that crude oil inventories fell by 1.93 million

barrels last week while market analysts expected

crude-stock to drop only 0.54 million barrels.

However, gasoline stocks rose 1.4 million barrels

while analysts expected of a 819,000-barrel gain.

Refinery crude runs fell 310,000 barrels per day

and refinery utilization rates fell 2.2 percentage

to 90 percentage of capacity. These caused the

great drop in oil price and made it close down

4.06 percent. The increase in gasoline inventories

can outweigh the decrease in crude inventories

because it came to the end of summer driving

season and there would be less demand to refine

the crude oil into gasoline. Besides that, the fall

in refinery crude run given the coming

maintenance season also put downward pressure

on oil prices since the loss of refining capacity

will send more crude oil into inventory.

Gan Jingzhi: Research Analyst (Global Macro)

Oil price initially

gained after fall in US

crude oil inventories

Oil price tumbled after

build in gasoline

inventories and falling

refinery runs

GLOBAL ECONOMICS: U.S. OIL TUMBLED AFTER BUILD IN GASOLINE INVENTORIES







GLOBAL ECONOMICS: GERMAN BUSINESS CONFIDENCE BOOST

The IFO Business Climate Index rose to 108.5

from 108.4 last month, surpassing market

expectations about the German industry and

trade. The rise comes as a surprise and

indicates Germany’s effort to take a slowing

Chinese economy in its stride.

Even though companies “expressed greater

optimism about future business developments,”

it needs to be mentioned that the index has not

taken into account the Volkswagen emission

scandal this past week. With one of Germany’s

leading brands and largest employers

embroiled in a scandal, the business sentiment

is expected to take a hit in the following month.

Mudit Kedia: Research Analyst (Global

Macro)





20



Toh Kai Yun Yeo Jian Hui Nicholas Tan Wei Hong Lucas Lee Zong Xing Tan Zhi Rong Saw Le Yong

Lim Kai Yan, Timmy Jethro Hee Ting Wei Khong Zhan Qing Gan Jingzhi Mudit Kedia

RESEARCH ANALYSTS





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WEEKLY MARKET OUTLOOK - NUS Investment Society · National University of Singapore | Mochtar Riady Building, BIZ1 2-7, 15 Kent Ridge Drive, Singapore 119245 | | contact