- The Australian dollar has rallied quite nicely during the trading session against the Singapore dollar, as we have seen it do multiple times over the last month or so.
- Ultimately, we had reached the 50-Day EMA and then launched from there, showing that perhaps there is more of a “risk on” attitude in the markets.
- This does make a certain amount of sense, considering that the Australian dollar has also done fairly well against multiple other currencies, including even the US dollar.
Risk Appetite
While this is not a currency pair that people trade all the time, the reality is that it’s an excellent risk appetite measuring stick, due to the fact that the Australian dollar is considered to be a “risk on currency”, while the Singapore dollar is considered to be a “safety currency.” In fact, a lot of traders look at the Singapore dollar as the Asian equivalent to the Swiss franc as there is a lot of banking done in that country, and of course it is a country that’s not exactly known for picking fights with others.
Technical Analysis
Looking at the chart, the 50-Day EMA has offered support more than once, and therefore I think it is an indicator that people will continue to pay attention to. Just above, the 0.90 level is an area that has offered a lot of resistance, and it does seem to be a bit of a barrier at the time that we cannot break above. However, I do think that given enough time if we can break above that level, perhaps on a daily close, then it opens up a move to the 0.9080 level.
On the downside, if we were to break down below the 50-Day EMA, it could open up the possibility of a move down to the 0.8880 level, where we see the 200-Day EMA. The 200-Day EMA of course will be an indicator that a lot of people look at as a potential trend defining mechanism. As long as we can stay above there, it’s more or less going to remain a “buy on the dips” market.
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