Weekly outlook of USD/SGD – 28th August 2018

USD/SGD Weekly Analysis for Singapore Brokers

Introduction

The Singdollar made a comeback starting from August 16, as traders and investors anticipate positive sentiment in the economy.

Asia/Singapore Fundamentals

Over the period of 2 weeks, Asian investors lowered their short-sell trades on Asian currencies, as indicated by a Reuter poll, following a weakening dollar and rising investor optimism over Sino-U.S trade talks. The Singapore economy grew slower than estimated following a flagging of moderation in growth.

Weekly Chart of the Singapore 30

USDSGD Analysis for Singapore brokers - 29th August 2018

Taking a look at the weekly chart of the Singapore 30 shown above, a bearish regular divergence sends the stock south as a breakout of bullish accumulation is formed around the same zones as the divergence pattern. The share price trades below the 65-period moving average as a sign of weakness. A further close below the trend line signal further short selling and a probable weak Singapore economy.

Daily Chart of the Singapore 30

Still on the Singapore 30 stock chart, although the prices are shorting in the long term, the daily chart shows a slight glimpse of recovery through the triggering of breakout out the pattern of both bearish and bullish accumulation patterns.

Technical

USDSGD: Monthly Chart

Let’s do a quick rollback on the oscillatory path the USDSGD pair has been on, starting from a bullish accumulation on 01 August 2014 to a divergence pattern that sends the pair tumbling down. This bearish move continued till a breakout of an alternating accumulation phase on 01 Jun 2018, which can also be seen through a MACD golden cross pattern. The exchange rate begins to slow as the MACD oscillator moves towards the zero level.

USDSGD: Weekly Chart

The above weekly chart shows a breakdown of the monthly charts time series, indicating a breakout of a bullish price action patterns that lead to majorly consecutive bearish candles from 09 October 2017 till 26 March 2018. The bearish accumulation pattern failed to huge buying pressure causing the pair to soar high in a bullish trend. A breakout of bearish accumulation pattern at the peak of a bullish trend is mostly approached with low risk and caution; with this, in mind, we’ll only take trades if the opportunity presents itself at the 1.35774 support level.

USDSGD: Daily Timeframe

A view of the above daily chart shows a more oscillatory pattern of the U.S dollar vs the Singdollar. The pair just broke out of a rising equidistant channel, indicating a recovery of the Singapore economy. Only time will tell if the pair does not break through the 65-period moving average.

USDSGD: 4-HOURLY Timeframe

The 4-hour chart is where we get a clear weekly overview. Going back to the last post we made on this pair, we highlighted the significance of the bearish regular divergence pattern on the 15th of August. A triple bearish accumulation pattern followed the divergence pattern pointing strongly towards a more bearish market direction. Well, it all turned out as we pictured it as price plummets into a series of majorly bearish closing candles. Price later broke out of the bearish accumulation pattern and moved deeply into the bearish trend. 

The pair later nosedive into another series of bearish closing candles after it made a high of 1.37466.

USDSGD: 2-Hour Chart

After going through the 4-hour chart, you’ll notice that there was no price action pattern that could have given us the slightest hint of the price drop after the high of 1.37466. Scrolling a bit deeper to the 2-hourly chart gives a clue on how that happened. A double bearish accumulation pattern was formed at the peak, followed by another breakout of a bullish accumulation pattern. Most recently, a breakout of a bearish accumulation pattern is triggered on the 28th of August, which may lead to a weakening of the SGD to USD exchange rate.

Projection and Conclusion

As some Singapore broker/s and traders are planning to short the pair following the fundamental optimism, we, on the other hand, will rather go Long on the pair in anticipation of a bullish divergence pattern. On the other hand,  a price close below the 1.36192 support level would signal short selling.

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DISCLAIMER

James Martin

I'm based in London ( England, UK )
I've been a professional trader for over 5 years.
Currently I work as forex analyst for different investment companies.

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