- The US dollar has initially fallen against the Singapore dollar during the trading session on Wednesday but continues to see plenty of support near the 1.36 level.
- The 1.36 level is an area that’s been supported over the last week or so, and it looks like we are trying to form some type of bullish flag.
While it hasn’t kicked off yet, it certainly looks as if that could be what we are trying to do and it’s worth noting that we recently had the so-called “golden cross” about 2 weeks ago. This is an indicator that a lot of people like the idea of holding onto it, but it is a long-term indicator, and it can be quite messy.
If we were to break down below the 1.36 level, then it’s possible that we could go lower, perhaps reaching down to the 50-Day EMA which is closer the 1.35 level. On the other hand, if we turn around and break above the 1.3675 level, then it opens up the possibility of a move to the 1.38 level. The 1.38 level is an area that has had massive resistance previously, and therefore I think it could be a bit of a target. Furthermore, the “measured move” of the bullish flag has us reaching that area quite easily if we do kick it off.
Greenback and safety
While the Singaporean dollar isn’t necessarily a risky asset, the reality is that when investors look for safety, they look for US Treasuries. Ultimately, this is the same thing as looking for US dollars, and therefore it does make a lot of sense that we continue to see a lot of move to the upside. Short-term pullbacks will continue to be buying opportunities as money flows back into the safety of the US dollar, and of course interest rates in America seem to be rising, not falling.
Ultimately, this is a pair that is typically fairly quiet, but we start to see a run toward the greenback overall, you would expect to see that play out in this pair as well, and you should also keep in mind that although this is a quiet market, it’s likely that we will continue to see a lot of momentum if there is some type of panic.
Ready to trade our daily Forex forecast? Here’s a list of some of the best regulated forex brokers to check out.