[ad_1]
Buying on the dips should work in this pair as can be said about most other exotic currency pairs at the moment that are denominated in US dollars.
The US dollar rallied ever so slightly against the Singapore dollar on Monday, but it should be noted that it was Independence Day in the United States, meaning that there was probably somewhat of a lack of liquidity. This would explain why the candlestick was so much smaller than the one before it, which obviously was very bullish.
Nonetheless, it looks like the 1.40 level will end up being defended, at least in the short term. Psychological resistance, or it could be the Monetary Authority of Singapore trying to defend its currency. I don’t know if the MAS is involved quite yet, but they do not hesitate to make it known if that’s the case. After all, it’s a relatively small currency, and I can assure you that the Federal Reserve doesn’t care about this exchange rate.
You should zoom out on the chart and take a look at the fact that we are forming a massive ascending triangle. This generally means that the market will build up enough momentum to finally break down, and when it does we should have some follow through. Much like their Indian counterparts, I believe that the Singaporean central bankers understand that the US dollar is going to strengthen no matter what they do. At this point, it is more or less going to be a job to keep the rate of change somewhat reasonable. Remember, when you are paying for goods in US dollars using your own currency, if it’s depreciating, that makes inflation even worse.
The Singapore dollar could get a little bit of a bid against other Asian currencies as a safe haven, but against the US dollar I think it’s going to continue struggle. That being said, I do not expect the Singapore Dollar to melt down, just that it will follow the same trajectory against the greenback as everybody else. On a daily close above the 1.40 level, it’s very likely that we will continue to go much higher. I anticipate that the 1.39 level and the 1.38 level both offer support, especially as the 50-day EMA just crossed above the 1.38 level. Buying on the dips should work in this pair as can be said about most other exotic currency pairs at the moment that are denominated in US dollars.
[ad_2]