TECH TARGETS: EUR/USD, GBP/USD, USD/JPY, AUD/USD, NZD/USD – UOB

EUR/USD: Neutral: Odds for a move above 1.0870/75 are not high.

The 1.0825/30 level that we have talked about since Thursday was finally met with an overnight high of 1.0825. Shorter-term upward momentum is slowing down and while a move above 1.0825/30 would not be surprising, the odds for a break above last December high of 1.0870/75 are not high. Support is at 1.0745 but only a move back below 1.0715 would indicate that a short-term top is in place.

GBP/USD: Bullish: To take half-profit at 1.2545/50.

GBP hit an overnight high of 1.2507 before closing on a strong note. The bullish phase that started on Monday  is still intact. However, from a shorter-term perspective, the rally appears to be running ‘too fast, too soon’ and those who are long should look to book half-profit at 1.2545/50, just below the 1.2570 high seen in late February. Stop-loss is unchanged at 1.2340.

AUD/USD: Neutral: In a 0.7600/0.7730 range.

There is not much to add as we continue to view the current movement as part of a 0.7600/0.7730 consolidation phase even though the immediate bias is for a probe lower towards the low end of the expected 0.7600/0.7730 range. Looking further ahead, as long as there is no sustained drop below 0.7600, we expect the current consolidation to be resolved to the upside.

NZD/USD: Neutral: In a 0.6950/0.7090 range.

As highlighted yesterday, NZD has likely made a short-term top at 0.7090 earlier this week. The current price action is viewed as part of a consolidation phase that could last for several days. Overall, expect sideway trading from here, likely between 0.6950 and 0.7090.

USD/JPY: Neutral: No signs of stabilization just yet.

While we expected USD to extend its decline towards 111.05/10, the pace of the drop and the ease of which this level is taken out came as a surprise (overnight low of 110.71). Despite being severely oversold, there is no sign of stabilization just yet and further weakness towards the psychology level of 110.00 is not ruled out. Overall, this pair is expected to stay under pressure unless it can move above stay above 112.50.

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M Asia Trade Tech Targets: EUR/USD, AUD/USD, NZD/USD, USD/JPY - UOB

EUR/USD: Neutral: Recovery to extend to 1.0825/30. 

It took a while but EUR finally managed to move above 1.0800 and hit an overnight high of 1.0819. This level is just below the solid 1.0825/30 resistance and as indicated in recent updates, is unlikely to yield so easily. That said, in view of the strong daily closing yesterday, a move above this level is not ruled out but shorter-term indicators are severely overbought and the odds for a move above last December high of 1.0870/75 are not high. On the downside, support is at 1.0745 but only a move back below 1.0715

AUD/USD: Neutral: In a 0.7600/0.7730 range.

AUD eked out a fresh high of 0.7750 but was unable to hold on to its gain. The subsequent sharp drop from the high indicates that the upward pressure post-FOMC has eased off. A temporary top is likely in place at 0.7750 and AUD is deemed to have moved into a sideway-trading range. That said, the immediate bias is for a probe lower towards the low end of the expected 0.7600/0.7730 consolidation range.

NZD/USD: Neutral: In a 0.6950/0.7090 range.

The rebound target of 0.7085 that was first highlighted last Thursday was exceeded as NZD hit a high of 0.7090 yesterday. However, the subsequent sharp drop from the high was unexpected. An interim top is likely place and NZD is deemed to have moved into a consolidation phase, likely between 0.6950 and 0.7090.

USD/JPY: Neutral: Oversold but room for extension to 111.05/10.

The sudden acceleration lower yesterday that took out the strong 111.65/70 support was unexpected. The decline is severely oversold especially from a shorter-term perspective but there is room for further extension to 111.05/10. Key short-term resistance has moved lower to 112.50.

Source: United Overseas Bank Global Economics & Markets Research

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SEA market ready to rate hike ahead of Fed meeting

Southeast Asian stock markets ended little changed in dull trade on Tuesday as investors were cautious ahead of a widely expected  interest rate hike by the U.S. Federal Reserve next week amid concerns about President Donald Trump's economic policies. 

Fed Chair Janet Yellen has signalled that the central bank might raise interest rates at its next meeting on March 14-15, and may move faster after that than it has in years.

After Janet Yellen's speech last week, the market will be ready for a rate hike when the U.S. Federal Reserve meets next week unless this Friday's jobs report is a disaster.

Consumer prices rose 3.3 percent but was within the range the central bank had expected, the statistics agency said.

Singapore shares rose after two sessions of falls, buoyed by financials and industrials. Real estate company CapitaLand Ltd gained 2.3 percent, while automotive conglomerate Jardine Matheson Holdings Ltd climbed 0.6 percent.

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STI Recovers Gap of Down Week; Impact of FOMC Meeting

WEEKLY WRAP OF STI

Straits Times Index (STI) opened lower at 2832.44 on Monday and ended higher to this week by recovering the gap down at the week start by closing at 2852.84. 3 Days Free Trial Signals

STI came off from its weekly peak of 2857.39 and low of 2831.10 this week and it keep on rising in 4 consecutive working days in this week which brought which recovered the fall on the opening at the starting of this week on Monday. Wall Street's sudden slump on Thursday suggests that markets are still locked in monetary expansion mode, preferring rates to remain depressed. the impact here was rises for the Straits Times Index before and immediately after the FOMC meeting.

MARKET FORECAST FOR WEEK AHEAD

STI is expected to be in positive sentiment next week. STI has taken support near 2757 and expected to maintain this support next week as well. It has its resistance at 2941. If it breaks this resistance than it might go up to 2950.

STI COUNTER SPECIFIC NEWS

• 
  MM-2 Asia has entered into an agreement to acquire a majority stake in Millinillion, a tech start-up developing interactive solutions for digital users globally.Millinillion is a company specializing in developing Business to Consumer (B2C) mobile applications and digital interactive solutions for clients.MM-2 and Millinillion will jointly develop a series of mobile applications in data-based marketing, music and industry talent pool management.
• Marine fabrication and engineering firm Triyards seems keen to divorce from the embattled oil & gas industry this year.The company has won contracts worth US$45.5 million ($64.5 million) to build vessels that have nothing to do with oil & gas, an industry suffering falling commodity prices and order cancellations.Other firms in the sector, such as SembCorp Marine and Keppel Corp have seen their share prices suffer this year amid falling demand for their rigs and vessels.
• Q&M Dental Group (Singapore) plans to restructure its stake in Qinhuangdao Aidite High Technical Ceramic Co ahead of a possible listing of the China-based manufacturing subsidiary.As part of the restructuring, Aidite will reduce its equity capital to 23.97 million yuan from 47 million yuan.
• Golden Land Property Development shareholders have approved Frasers Centrepoint's (FCL's) proposed acquisition of 29.5% of its enlarged share capital through a 4.97 billion baht ($196 million) new capital injection.Golden Land is one of the country's leading real estate developers engaged in residential and commercial property development, as well as property management and property advisory services.
• Mencast Holdings says its energy services division has renewed its service contract with the Asian headquarter of an oil supermajor for environmental remediation services for another three years.The contract also includes the option for an extension for a further two years.Another exiting long-term contract with the same client has also been revised to include additional services and increased volumes for the remainder of its term.
• CMC Infocomm expects to report a net loss for 1H2016.The net loss was primarily due to substantial one-off professional fees incurred in relation to the initial public offering exercise when after the company was listed on the Catalist board .In addition, the group recorded an increase in overhead expenses, mainly payroll expenses due to additional headcount to support the execution of the group's expansion into new and complementary businesses in Singapore and Malaysia.Shares in CMC Infocomm closed flat at 15.1 cents.

GLOBAL FACTORS AND WORLD INDICES

• Asian shares took their cue from Wall Street and slipped on Friday, and Japanese stocks slumped after briefly jumping on the central bank's statement that it would expand parts of its stimulus programme.
• China stocks held nearly steady on Friday, capping a dramatic week that witnessed a strong relief rally in the previous session following an expected rise in US interest rates.Investors are now refocusing on economic fundamentals, with a key central government economic meeting that starts on Friday likely to offer the market fresh cues for directions.The blue-chip CSI300 index rose 0.3 per cent, to 3,767.91.
• Japanese stocks fell on Friday in a session that turned volatile after the Bank of Japan announced it would maintain its massive stimulus programme's base money target while expanding the types of assets it purchases.The benchmark index was down 1.9 per cent to 18,986.80, and had lost 1.3 per cent for the week.
• Hong Kong stocks ended Friday slightly lower, as many sectors corrected after the previous session's relief rally following the long-expected US interest rate hike.The Hang Seng index fell 0.5 per cent, to 21,755.56, while the China Enterprises Index lost 0.3 per cent, to 9,634.41 points.
• European stock markets slid at the start of trading on Friday as a rally inspired by the US interest rate hike petered out heading into the weekend break.London's benchmark FTSE 100 index dropped 0.8 per cent to 6,056.9 points .
• China's ravenous appetite for overseas assets is powering a record year for Asian dealmaking, with deal volumes in the region surpassing the US$1 trillion mark annually for the first time.Acquisitions involving companies in the Asia Pacific region rose 55 per cent in 2015 to US$1.2 trillion.Chinese buyers snapped up premier assets, ranging from the world's biggest luggage handler to Italian tire brand Pirelli & C SpA, and accounted for about half the deals from the region.
• Singdollar projected to decline most in 2016 amongst Asian currencies as the growth in Asia's developing economies will slow to 6.4 per cent next year from 6.5 per cent in 2015, with China's expansion decelerating to 6.3 per cent from 6.8 per cent. That means Asian central banks will need to further cut interest rates while the Fed gradually tightens, resulting in outflows and weaker currencies.
• The US dollar pushed higher against other major currencies on increasingly bullish sentiment about the greenback following the Federal Reserve's historic decision to lift US interest rates.
• Crude prices sank deeper in Asian trading on Friday after the US oil benchmark closed at its lowest level since February 2009 on worsening oversupply concerns and a stronger dollar.West Texas Intermediate (WTI) for January delivery was trading at US$34.77 per barrel, 18 cents off its close of US$34.95 in New York.
• Gold steadied on Friday but largely kept losses made a day earlier when the metal suffered its biggest slide in five months after U.S. interest rates were raised for the first time in nearly a decade and the dollar surged.Spot gold ticked up 0.3 percent to $1,054.40 an ounce by 0327 GMT, following a 2 percent slide in the previous session, its biggest one day slide since July. The metal is down nearly 2 percent for the week in its worst performance in six weeks.

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Singapore STI Ended Higher With Positive Sentiment in its Next Trading Session

STI MARKET REVIEW:

Singapore’s benchmark Straits Times Index (STI) opened 3.43 points higher or 0.12% on Thursday morning after the US Federal Reserve raised its short term interest after 7 years and the market ended higher to 20.26 points or 0.71 percentage higher at 2861.18. STI came off from its intra-day peak of 2868.27 and low of 2833.57. Market breadth was positive. Excluding warrants, gainers outnumber decliners 200 to 165. Get Free Trial of Trading Signals

LOCAL BOURSE

Non-oil domestic exports fell 3.3% y-o-y in November after flat growth in October.On a m-o-m, seasonally adjusted basis, NODX slipped 3.8% after October's 0.3% dip.Both the y-o-y and m-o-m figures for October have been revised: the former was earlier reported to be a 0.5% decline and the latter was a 1.1% rise.Non-oil re-exports continued to increase in November, but eased from 6.1% in October to 5.1% y-o-y,due to an expansion in both electronic and non-electronic NORX.

MARKET FORECAST

STI is expected to consolidate with positive sentiment in its next trading session. Also the market has responded positively towards the interest rate hike by Federal Reserve for the first time in nearly a decade on Wednesday. It has its support at 2829 and resistance at 2876. Investors are cautious as Singapore non-oil domestic exports fell in November but the market is expected to move with positive sentiments.

STI COUNTER SPECIFIC NEWS

• IPC Corporation is proposing a capital reduction move to return $136.467 million in cash to shareholders, or $1.60 per share.The existing cash hoard of the company came from sale of seven hotels in Japan for around JPY14.94 billion, or some $172.22 million.
• The Trendlines Group has established two new portfolio companies, Tandem Technologies and Zeev Implants, via its unit Trendlines Medical.The two new companies bring the total number of Trendlines portfolio companies to 47.Tandem Technologies aims to make the process of removing and retrieving colon polyps much more efficient and accurate, with the goal of a near 100% retrieval rate.
• EZRA Holdings has agreed to buy subsidiary EMAS Offshore's entire 12.13 per cent stake in Malaysia-listed Perisai Petroleum Teknologi for US$56 million, a 500 per cent premium to the share market value.The agreed price of US$56 million is based on the cost of EMAS's investment at inception.

GLOBAL FACTORS AND WORLD INDICES:

• Asian stock markets jumped on Thursday as investors chose to take an historic hike in US interest rates as a mark of confidence in the world's largest economy, lifting the dollar and piling on the pain for oil prices.China also allowed its currency slip for a 10th straight session to hit its lowest since June 2011. The steady decline in turn puts pressure on other Asian currencies to depreciate to stay competitive.
• The Federal Reserve hiked interest rates for the first time in nearly a decade signaling faith that the US economy had largely overcome the wounds of the 2007-2009 financial crisis.The US central bank's policy-setting committee raised the range of its benchmark interest rate by a quarter of a percentage point to between 0.25% and 0.50%, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs.
• China stocks rallied on Thursday as risk appetite improved after the Federal Reserve raised rates for the first time in nearly a decade, as expected, removing a major source of uncertainty about the US central bank's policy.The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 1.9 per cent, to 3,755.89.
• The People's Bank of China set its official midpoint rate at 6.4757 per dollar, its weakest level since June 2011, and 0.2 per cent weaker than the previous fix of 6.4626.The sharply weaker yuan midpoint reflected the dollar's strength in global markets after the US Federal Reserve raised its policy interest rate overnight, traders said.
• Tokyo stocks jumped on Thursday after the US Federal Reserve hiked interest rates for the first time in nearly a decade, underscoring its confidence in the health of the world's top economy.The benchmark Nikkei 225 index at the Tokyo Stock Exchange gained 1.59 percent, or 303.65 points, to finish at 19,353.56.
• Australian shares rose 1.46 per cent on Thursday, joining a global equities rally as investors piled back into the markets after a US interest rate hike signalled confidence in the world's largest economy.The S&P/ASX 200 index rose 73.55 points to 5,102 at the close of trade, after reaching a high of 5,129.1 earlier in the session.
• Japan's exports in November fell at the fastest pace in almost three years as shipments to Asia declined in a worrying sign that weakness in overseas demand could curb economic growth. Data showed that exports fell 3.3 per cent in November from a year earlier, more than the median estimate for a 1.5 per cent annual decline.
• The US dollar rose slightly against the euro and the yen on Wednesday after the US Federal Reserve's historic move to raise interest rates for the first time in nine years.The dollar rose to US$1.0911 per euro around 2200 GMT from US$1.0930 at the same time on Tuesday. The greenback was up 0.5 per cent at 122.26 yen.
• Gold slipped on Thursday to give back some of its overnight gains, with trading choppy as the dollar surged after the Federal Reserve hiked US interest rates for the first time in nearly a decade.Gold has slumped nearly 10% this year, largely on uncertainty around the timing of the rate rise and on fears that higher rates would hit demand for the non-interest-paying metal. It had fallen to a near-six-year low earlier this month.
• Crude prices extended losses in Asia Thursday after another report showing a further increase in US stockpiles added to fears about a global glut.The under-pressure commodity suffered fresh selling on Wednesday after the US Department of Energy showed that supplies rose 4.8 million barrels.

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Bursa Malaysia; Market Review for KLCI- 11 Dec

The FBM KLCI index lost 10.71 points or 0.65% on Thursday. The Finance Index fell 0.25% to 14107.75 points, the Properties Index dropped 0.45% to 1180.61 points and the Plantation Index down 1.22% to 7358.69 points. The market traded within a range of 12.54 points between an intra-day high of 1661.19 and a low of 1648.65 during the session.

The KLCI extended its losing streak for the third day after closing lower at 1648.65 points amid overnight losses in US market. Market sentiment was muted as oil prices continued to slide.

Market forecast for KLCI:

The KLCI index is expected to end the week with bearish sentiments on the back of the week global economical outlook, technically the index had crossed the level of 1660-1657 and it can drop further in near term. 

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KLCI COUNTER SPECIFIC NEWS :

• Malaysia palm oil futures closed lower on Wednesday as traders squared positions ahead of key supply and demand data fr U.S and Malaysia.
• Country Heights Holdings Bhd (CHHB) has inked a joint venture agreement with Galaxus Corp Sdn Bhd (Galaxus) and Tan Sri Lee Kim Tiong.
• EG Industries Bhd is disposing of six parcels of unexpired leases of industrial land, measuring 6.28ha in Bandar Kuala Ketil in Kedah, for RM9 million to calcium-based chemical product manufacturer and trader Schaefer Kalk (Malaysia) Sdn Bhd.
• SP Setia Bhd,the country's biggest listed property developer by sales, is confident it can achieve its RM4 billion sales target for this year, underpinned by RM9.5 billion of unbilled sales.
• Kumpulan Perangsang Selangor Bhd’s (KPS) independent director Rosely @ Mohamed Ross Mohd Din told shareholders that the Selangor state-owned investment holding company will find a new business to invest in, after the disposal of its 90.83% stake in Titisan Modal (M) Sdn Bhd, which wholly owns the water treatment operator Konsortium ABASS Sdn Bhd.
• PUC Founder (MSC) Bhd (PUCF) has obtained the approval from Bursa Securities and the Securities Commission Malaysia (SC) for its proposed renounceable rights issue of irredeemable convertible unsecured loan stock (ICULS), with warrants to raise up to RM83.9 million.
• SCGM Bhd posted a net profit of RM4.79 million for the financial second quarter ended Oct 31,2015 (2QFY16), a 57.6% increase from RM3.04 million a year ago, helped by favourable product mix, lower fuel cost and strengthening of US dollar against the ringgit.
• Berjaya Food Bhd net profit plummeted 96% to RM6.2 million or 1.65 sen per share in its second financial quarter ended Oct 31, 2015 (2QFY16), from RM163.60 million a year ago, due to the remeasurement gain of RM158.60 million last year and foreign exchange loss.
• Sanichi Technology Bhd shares surged 18.75% in early trade today after Sanichi yesterday signed a memorandum of understanding (MoU) with German firm Protev International GmbH to form a joint venture in providing a one-stop product and service centre to all its customers worldwide in the manufacturing of plastic injection moulds and tools.
• Kimlun Corporation Bhd rose 2.08% this morning after AllianceDBS Research said renewed buying interest had emerged in Kimlun and that Kimlun had on Dec 9 traded higher to RM1.45 before closing near the day’s high at RM1.44 (up 6 sen or 4.34%).
• Transocean Holdings Bhd executive director Tan Swee Hock has voluntary resigned from his post effective yesterday after being charged by the Securities Commission Malaysia (SC) for insider trading.

GLOBAL FACTORS AND WORLD INDICES:

• A sense of unease spread across Asian stock exchanges Thursday with investors spooked by the sharp sell-off in oil sending most regional markets lower.With crude sitting around seven-year lows energy firms came under further pressure, following more losses on Wall Street.
• China shares ended lower on Thursday, giving up modest gains even after regulators reassured investors that reforms to company listings would not open a floodgate of new offerings.The CSI300 index of the largest listed companies in Shanghai and Shenzhen fell 0.4 per cent.
• Hong Kong shares weakened on Thursday, pulled lower by resource shares, as investors remained wary of falling commodity prices and ahead of a likely US interest rate rise next week.The Hang Seng index fell 0.5 per cent, to 21,704.61.
• Tokyo's benchmark stock index fell for a third straight session on Thursday as a strong yen dented exporters, and after Wall Street dropped on oil prices sinking to fresh seven-year lows.The Nikkei 225 at the Tokyo Stock Exchange sank 1.32 per cent, or 254.52 points, to 19,046.55 by the close.
• Australian shares fell 0.84 per cent on Thursday led by financials as stronger-than-expected jobs data further diminished the chances of a Reserve Bank rate cut.The S&P/ASX 200 index slipped 42.75 points to 5037.7 at the close of trade.
• Singapore GDP growth will remain lacklustre, reflecting a weaker outlook for China and Asean, as well as lower trend growth with domestic restructuring.The bank expects government measures in the property, transport and telecommunication sectors to be closely watched.
• Vehicle sales in China rose 20 per cent in November from a year earlier to 2.5 million vehicles, an industry association said on Thursday.The increase was the largest since October 2013 and compares with an 11.8 per cent rise in October and a 2.1 per cent increase in September.
• Oil prices edged up in Asia on Thursday following signs of a slight improvement in US demand but concerns that an oversupply will persist past next year kept the the commodity struggling at multi-year lows.
• The dollar eased against most rivals in Asian trade on Thursday, with commodity-linked units enjoying support from a slight uptick in oil prices, while its Australian counterpart surged on the back of a strong jobs report.
• Gold failed to log gains despite a 1.1 percent drop in the dollar index on Wednesday to its lowest in a month.

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DAILY FOREX TECHNICAL ANALYSIS REPORT

GBPUSD

The GBP/USD pair which was initially falling on Tuesday found enough support at 1.50 level to turn the things around and formed a rather positive hammer in the end. What remains to be seen is the direction it takes from here. We are currently holding no hopes of spikes rather are focusing our time on identifying selling opportunities. In our opinion, a breakdown below Tuesdays candle can also be a selling opportunity.

EURUSD

The EUR/USD pair went a notch higher on Tuesday, shooting through the hammer candle formed on the previous day. Although the sky seems to be clear but we do see a storm coming. In other words, we are going to sit this one out. 1.10 level above is going to be our flag off level. On the flip side, if we break the bottom of the hammer on Monday, we might think about entering a short position. After 1.10 level, we might set our eyes on 1.14 level, but that depends on crossing the 1.10 level first.

AUDUSD

The AUD/USD pair formed a candle possessing hammer like characteristics following an encounter with a support level that allowed it to take a U-turn. Any break above the hammer is a bullish signal and indicates an upward momentum. However, in the opposite direction it might move to 0.71 level. Australian Unemployment data would be among the figures released that would be having an impact on this pair.

USDJPY

The USD/JPY pair took a bounce on Tuesday. However, we still haven't escaped the previous consolidation area; hence we are not sure how long this bounce will go in upward direction. The markets as always are in full oscillations, hence we are looking for some decent pull back that might give a significant profit. Apart from this, there is resistance zone extending from 124 level to 125 level.

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