Morning Dew -1 July 2014

A Good Start

JCI started the new week on a firm footing, sparking a new hope that the current doldrums is about to finish.

With just less than two weeks, the presidential election will become the key theme in July. The more market friendly Jokowi-JK remains as favorite despite the pair’s electability has been declining recently. It’s going to be a close call this time.

Tuesday will see trade balance data and inflation set for release.

The coming week will also feature the nonfarm payrolls data for June, which is expected to fall from 217k to 210k. Unemployment rate which is also set for release next Friday is expected to stay at 6.3% in June.

USDIDR fell sharply to 11,969 per US$, against the prior closing rate of 12,103 per US$.

Data Ahead

Trade balance data for May is expected to show a surplus of US$15 billion against the prior period which showed a deficit of US$1.96 billion.

June inflation is also seen faster at 9% (YoY) compared to 7.32% seen in May, while the month-on-month inflation is also gaining pace from 0.16% to 0.56% in June.

Manufacturing PMI is expected to show an uptick to 52.4 in June from 51.21 in prior month.

All the above data is set for release next Tuesday.

Technically Speaking...

JCI off to a fine start on Monday, but still confined within its consolidation range between 4,775-4,909 . The price pops above the 50-day EMA, but need more evidence to convince that the downside is over.

The next resistance lies at 4,909, followed by 5k and subsequently at 5,091. Beyond the latter the index will aim at 5,251 – the all-time high seen last year.

Next support is now seen at 4,800 and 4,775-4,780 afterwards where the 100-day EMA lies.

MACD inched slightly higher but still below the zero line while RSI has continued to seesaw near the neutral zone. Volume jumped above Friday’s level.

Day  Ahead

JCI is seen to continue trading within the confine of its consolidation range as the market essentially awaiting for the upcoming July 9th presidential election. USDIDR remains weak as BI seems to be tolerating the current weakness. Several key data are set for release on Tuesday, but all eyes will be focusing on the election instead.

Click here to download the full update (PDF)