Christmas is here and trading activity slows down for the holidays, as usual. We are expecting lower volatility and thin liquidity in markets during the last week of December.
USDSGD broke above the resistance zone at 1.44 last week as the uptrend accelerated amid the Fed raising rates for a second time in a period of one year. In addition, the FOMC projections showed that the committee now expects rates to rise 3 times during 2017 instead of 2 times before from the September projections. As a result, the US Dolar strengthened significantly.
No major economic reports are to be released from Singapore binary options next week, while from the US there will be the pending home sales and report and the CB consumer confidence. With this in mind together with the holidays period, we can expect range-bound trading for the last week of the year. Longer term, the uptrend is likely to continue for a little longer amid the continued Dollar strength.
USDSGD Daily chart – The uptrend is strong
Technically the uptrend is also likely to continue, as you can see on the chart the second channel (possibly middle of the trend) is steeper than the first channel (beginning of the trend). According to the Elliot Wave theory analysis, we are currently in an extended 3rd wave – meaning there is more room for this uptrend to continue.
On the monthly chart, there is no resistance up to 1.54. Considering that USDSGD is trending up since 2011 and the current swing up is much steeper than the previous upswings, the 1.54 resistance zone could be easily reached in the next few months.
USDSGD monthly chart – Long term uptrend in the pair
It will be important, however, for traders to keep in check the channel we showed on the daily timeframe because as long as it holds the current upswing will hold as well. The end of the current upswing will likely mean that a deeper correction will follow before any new push up could emerge
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