The SGD/CHF pair fell rather significantly during the session on Wednesday as a lot of traders looked for a bit of safety in what was a remarkable session overall. A lot of volatility would’ve been due to the fact that the US GDP numbers fell rather significantly, and as a result people started scrambling to reposition their currency trades. You have to keep in mind that the Swiss franc of course is a safety currency, and while the Singapore dollar isn't necessarily a risky currency in and of itself, it is based in Asia which of course is going to cause a little bit of volatility when risk starts to become a thing that traders don’t want to be involved in. After all, Singaporean banks tend to be financiers of Asian construction projects. Think Third World development, and there’s probably some type of Singaporean investment bank involved.
Watching this wedge
As you can see on the chart, there’s a significant wedge that is being tested. With that, and the fact that the candlestick was so long and read during the session, I cannot help but think that we could possibly break down a little bit. If we can close below the bottom of the wedge, I would be willing to sell this market and aim for the 0.69 handle. I don’t know if we could go below there, because quite frankly nobody wants to hang onto the Swiss franc for any longer than they have to, but at this point in time I would anticipate that a move away from risk could very well be coming. After all, I can see that the Australian dollar looks very sick all of a sudden, so was the New Zealand dollar, and quite a bit of the US dollar losses for the session were overturned by the time everybody went home. With that, it would make sense that the Swiss franc picks up a little bit of strength in the short-term. Ultimately though, I think this is a short-term trade waiting to happen.
