Trading the Singapore dollar against the Swiss franc is probably something that most of you don’t do, but I find this to be very interesting pair for several reasons. For starters, you have to keep in mind that the Singapore dollar is essentially the Swiss franc of Asia. What I mean by that is that a lot of “safety trades” involve the Singapore dollar as it is a banking center for that region of the world. With fact, it’s always interesting to see the dichotomy between the Singapore dollar and the Swiss franc, as they serve similar purposes.
The fact that we saw the Singapore dollar fall so significantly against the Swiss franc during the Friday session tells me that the world is starting to tilt back towards Europe in general. Think of it this way, if the European Union is doing fairly well or at least doing better than once was, the damage to the Swiss economy is going to be very minimal. Quite frankly I feel that the Swiss franc has gotten a bit of a raw deal at times because of its reliance on European markets to send exports. This tells me that the world is starting to favor Europe over Asia, or at least isn’t so afraid of the European Union.
Selling rallies
From a technical standpoint, I can see that the breakdown below the bottom the shooting star on Thursday sends us looking for the 0.6850 level again. I think that the 0.68 level below is pretty significant as far as support is concerned, but it does appear that we are going to break down below that given enough time. I think that looking to shorter-term charts for rallies that you can start selling based upon weakness or a failure to hang onto gains would be the best way to trade this market right now. This is in exactly an overly active market, and the fact that we are trading in the middle of summer time illiquid markets tells me that you should be aiming for small short trades.
