To offset this downward pressure, quarterly momentum has flattened and has started to display a mild positive divergence with the index. In and of itself, positive divergences could limit declines but are unlikely to trigger upmoves unless quarterly momentum is able to breakout on the upside. This is not likely in the near term. Sometimes, positive divergences can last for weeks, and at times for more than a month.
Sentiment is fragile. In 2Q2022, China barely escaped a quarter of y-o-y negative growth. The US yield curve still suggests a recession. Yields on 2-year treasuries are at 3.118% as at Jul 15 compared the yields on 10-year treasures of 2.934%. Inflation in the US is above 9% pointing to at least a 75 bps Federal Funds Rate hike this month, if not more. On the other hand, Sora peaked at 1.9374 during Jul 12-15, while yields on 10-year Singapore Government Securities remain at 2.81% after rising to 3.04% on June 28.
There is a tweak to the technical outlook. Immediate support has been established at 3,092-3,098, and the main support stays at 3,000 for the time being. There is no change in the resistance level of 3,160.
