During the session on Monday, the SGD/JPY pair fell initially during the day, but found plenty of support below as we have seen time and time again just above the 85 handle. On top of that, we bounced enough to form a bit of a hammer, so it does suggest that the buyers are starting to return. Ultimately, this market could very easily bounce all the way back to the 87 handle.
Both of these are considered to be safety currencies, as the Japanese yen of course finances quite a bit of economic development, but then again so does the Singapore dollar. With that being the case, the market does tend to grind quite a bit but I like this particular pair because it is so stable overall. We have fallen quite a bit over the last year, but it appears that somewhere around 85 there is plenty of support that should turn things back around.
Steady As She Goes
Ultimately, this is a market that should be “steady as she goes”, as the market tends to grind its way in one direction or the other. If we can break above the top of the hammer for the session on Monday, I believe that we will grind our way to the 87 handle, and then higher than that more than likely. That being the case though, you have to be very careful and more importantly, patient when it comes to trading this market.
For those of you who have never looked at this particular pair, the spread on my particular broker is 6 pips, which is more than doable. That being the case, this is a nice longer-term trade type of market as simply letting the market do its thing and holding on for the grind higher can be a very easy and enjoyable ride. One thing though, if we break down below the 85 handle, I would step away completely.
