Optimism and relief are expected to be the dominant sentiments for investors on Monday, as Washington reaches a tentative agreement on the US debt ceiling, removing the risk of a default that could potentially rock the global financial world. Trading and market liquidity in Asia is expected to be lighter than usual, but with US and UK markets closed for the holidays, there is potential for great volatility. Positive sentiment came from Wall Street rallying strongly on Friday, especially Nasdaq and mega tech stocks. The latest economic data release from the US on Friday reported that Core Durable Goods Orders (Apr.) growth on a monthly basis fell to the minus 0.2% mom area, while the Core PCE Price index (Apr.) which is the Federal Reserve’s favorite inflation indication rose 0.4% mom. Personal Spending (Apr.) also doubled the projection to 0.8% mom. Michigan Consumer Expectations & Sentiment (May) further moved in an expansionary direction at 55.4 & 59.2 respectively. The Dollar Index, which measures the strength of the USD against other major world currencies, was solid at 104.26, a 2-month high.

Last Friday’s JCI Closing was below MA10 Support, making the 6706 the least level that must be broken immediately to keep JCI from further downtrend. TheĀ  possibility of testing the 6660-6650 Support area (or even 6560-6550) is still open. Therefore, NHKSI RESEARCH advises Indonesian investors/traders to hold off on buying more until at least JCI secures itself above MA10 as the first crucial requirement.

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