The USD/SGD pair initially tried to rally during the course of Friday, but as you can see pulled back in order to form a shooting star. This is the second shooting star in a row, and that of course is very bearish as far as I can see. On top of that, the market has recently pulled back from the 50% Fibonacci retracement ratio, and that of course is an area where a lot of traders will get involved. With that being said, it makes sense that this market would continue to break down.
If we can break down below the bottom of the range for Friday, I believe that this market will then head to the 1.3350 level, and then ultimately down to the lows again. This is classic technical analysis, but that doesn’t mean that it is going to be an easy trade to hang onto.
Selling rallies
I believe the going forward selling short-term rallies will be the way to go as well, and it’s only a matter time before the sellers come back in and push this market much lower. The pair tends to mimic the USD/CHF pair, which of course looks like its ready roll over as well. Ultimately, I don’t have any interest in going long of this market until we break above the range from the last couple of sessions. If we did do that, the 1.37 level would be the target which is right around the 61.8% Fibonacci retracement level, an area that should be resistive as well.
The Singapore dollar tends to be a bit of a “safety currency” as far as the Asian markets are concerned, and with that it’s only a matter of time before concerned has the market going back to Singapore. Ultimately, it could be a volatile market, but keep in mind that no matter what happens, this pair tends to move very slowly. You have to be patient to trade this market, but it does trend quite nicely.
