The Singapore dollar is one of my favorite currencies to use in order to play off of Asian strength or weakness. Also, it can be used in general to play the developing world as Singaporean banks tend to be where emerging markets go in Asia to find funding. So in other words, as places like Laos and Burma expand, large corporations and governments will borrow money from places like Singapore.
On the other side of the equation you have the Swiss franc. That of course represents safety and stability. Very few places in the world represent stability more than Switzerland as far as banking is concerned, so in other words when this market falls, it shows that money is leaving the emerging markets, specifically Asia.
Ultimately, the fact that we formed a shooting star on Friday just below the 0.75 level suggests to me that we are possibly getting ready to fall. After all, you can see that back in September we made a much higher high, but now we are struggling to get above there again. If we can break down below the 0.74 level, at that point in time I feel that this market will probably draw enough sellers into it to go back to the 0.73 level, and then possibly the 0.72 level.
Be patient and wait for daily closes
I want to see a daily close below the Thursday candle in order to start selling. Once I see that though, I recognize that we should have a decent downtrend to follow. Don’t be concerned though, because this pair does tend to be rather choppy and move somewhat slowly. With that, you’re going to have to be patient and it won’t necessarily be the type of trade that you will make your money in a short amount of time. With that being the case, think of this more or less as a mid-level investment, not necessarily something you’d hang onto forever, but something that might take a couple of weeks to get to where you want to go.
