Potential signal:
- I am a buyer of this pair, right here, right now.
- I would put a stop loss near the 1.3520 level, with a target at the 1.36 level above.
- The US dollar initially tried to rally during the trading session on Friday but found enough resistance near the crucial 1.36 level to turn around and serve falling.
- At this point, it looks like we are testing the 1.3550 level, an area that previously has been resistant. Because of this, the market will be looking at this through the prism of “market memory.”
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All things being equal, you should pay close attention to this pair, because it is essentially a battle between the greenback, which of course is the world’s reserve currency and a major safety currency, and the Singapore dollar, which of course is very much like the Swiss franc for that region of the world. In other words, there is a reason why this market doesn’t make wild moves, and that can be somewhat “boring” from time to time. Furthermore, you can also give you an idea of just how money is flowing either to or from Asia overall.
Technical Analysis
The market continues to move and 50 point increments, and I think that will continue to be the way going forward. The Singapore dollar of course is somewhat controlled by the Monetary Authority of Singapore, and therefore we need to be cognizant of the fact that the one thing that the MAS is looking for is stability. With that being said, it makes a lot of sense that we simply bounce back and forth.
Underneath, we have the 50-Day EMA near the 1.3510 level, an area that is also supported by the 1.35 handle. That’s an area that’s also backed up by the 200-Day EMA, and therefore I think you look at this through the prism of whether or not we can find buyers in that area. I certainly think we could, that’s assuming that we can even drop that far. Quite frankly, most Asian currencies are struggling in general, and I do think that continues to be the case going forward. Because of this I am bullish, but I also recognize that this pair is somewhat muted.
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