CHF/SGD Forecast: Swiss Franc Challenges Major Area Against Sing Dollar

• The Swiss franc has been somewhat quiet during the trading session on Wednesday, but while you were not paying attention, it had spiked quite radically against several currencies.
• One place that we have seen a lot of momentum is against the Singapore dollar, and this is important for a multitude of reasons.

One of the biggest reasons that I think this is a situation where we need to be paying attention due to the fact that the Swiss franc and the Singapore dollar both considered to be safety currencies, so this could give you an idea of where money is flowing globally. For example, if the Swiss franc is genuinely strengthening against the Singapore dollar, it could show a real reluctance into economic activity as far as Asia is concerned. Remember, Singapore is considered to be one of the major banking hubs of Asia, so therefore if money runs away from it, it suggests that the market is likely to continue to see other currencies do fairly well against Asian ones.

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Technical Analysis

The technical analysis for this pair is very interesting to me right now, as we hang around the 1.53 SGD level. This is not only a big figure obviously, but it’s also where the 50% Fibonacci retracement level hangs, from the major selloff that we had seen previously. Because of this, I would expect to see a lot of noisy behavior and I think that the market will continue to pay close attention to what happens in this area. If we were to continue to go higher, then it’s likely that the market participants will try to drive the Swiss franc to the 1.55 SGD level. After that, then we are probably looking at running all the way to 1.58 above.

On the other hand, if we do fall from here, I think that there is quite a bit of support at the 1.51 level, and again at the 200-Day EMA which is sitting just below there. Keep in mind that this is a pair that typically is fairly quiet, but the fact that we have seen such a huge surge higher suggests to me that something is happening under the hood. Whether or not you choose to trade this pair is completely irrelevant, but what is important is that you recognize it is a bit of a hint as to what other markets may or may not be strong.

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