Potential signal
- I am a seller of this pair, right here, right now.
- I would have a stop loss at the 1.3560 level, and a target of 1.3465 underneath as it is just simply a short-term range bound trade.
The US dollar has pulled back slightly during the early hours on Monday as the 1.3550 barrier has offered resistance yet again against the Singapore dollar. The market has been fairly sideways over the last several weeks, so the idea of trading this pair back and forth makes quite a bit of sense, as it could give us an opportunity for short-term trades.
Remember, the Singapore dollar doesn’t necessarily move very quickly, and you need to think of this more or less like trading the Swiss franc. After all, the Swiss franc tends to be more of a slow mover, but it does tend to pay close attention to technical analysis. With this being the case, I think you need to look at this pair as one that is offering yet another sideways trade situation where we have well defined support and resistance. The 50-Day EMA and the 200-Day EMA indicators are both going sideways, so I think at this point in time it shows just how lackluster this pair has been.
Setting up for a Trade
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At this point in time, I do think that we are going to drop. I don’t necessarily think that is going to be a major selloff, but I think it makes a lot of sense that we continue to do more of the same that we have seen, at least until something changes. Right now, it doesn’t look like anything is going to change, and it’s probably worth noting that the Stochastic Oscillator has recently found itself in an overbought condition, and now is trying to do everything he can to drift lower, right along with price.
While I do not necessarily think that this is a blockbuster trade, I think it does set up for a potential short-term selling opportunity. I would like the idea of shorting this pair as long as the US dollar is struggling, and it certainly looks like the market has moved against the greenback during the Monday session. If we get any follow through on Tuesday, then I do think it’s probably only a matter of time before the Singapore dollar also gains against the US dollar.
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