The USD/SGD pair tried to break out during the session on Friday, but struggled later in the day at the 1.3750 level. By doing so, we pullback and formed a shooting star which of course is a fairly bearish sign. However, you can see that on this chart I have drawn a yellow rectangle. With that being the case, it appears that the market will try to consolidate in this area overall. The US dollar continues to be strong overall, and as a result the markets will continue to go higher given enough time. The Singapore dollar will of course suffer as the Asian economies are slowing down.
Keep in mind that Singapore tends to finance the projects in Asia, as the banking sector is so strong. The markets will continue to be a bit leery of Asia in general, and the US dollar is considered to be “safety” overall. The markets look at the Sing dollar as safety as well, but only if things in Asia are going alright, and in a relative basis to other Asian currencies.
Pullbacks should be opportunities
I believe that this market should offer pullbacks that turn out to be opportunities. The Dollar is the most favored currency around the world. This should be the same story here, and this is just another sign of what we are seeing all around the world – Greenbacks are preferred.
The 1.3650 level should be supportive, so I am looking for a pullback in order to take advantage of “value” in this market as we should see a continuation of the trend. After all, we have broken above the 61.8% Fibonacci retracement level, which is normally a sign that we are going higher. The pair should continue to be fairly choppy overall, but that is normal for this market. A quick mover it isn’t typically. The pair tends to be very steady, so patience will be needed for any long position taken.
