The US dollar has been grinding sideways overall against the Singapore dollar as of late, but in the short term outlook piece, I will explore the idea of the “buy zone” and the “sell zone.” Looking at the chart, it’s easy to see that the 1.36 level is important and separates the two. By knowing the right side of the market, you can help yourself drastically as far as your trading is concerned.
The role of Singapore
The Singapore dollar is considered to be one of the more stable Asian currencies, as Singapore is a financier of a lot of growth projects in that region. You can think of it as instead of playing the construction of Asia, you are playing the finance of Asia. The fact that the global economy is shifting around quite drastically, and we are quite sure about the US/China trade relations outcome, it makes sense that this pair could be a bit stronger recently, as the US dollar will attract a lot of money going into treasuries.
That being said, the technical picture does show that there is significant support and resistance at the 1.36 level, but we also have the 50-day EMA pictured in red getting ready to rake above the 200-day EMA pictured in black. That is what is known as the “golden cross”, which is a longer-term bullish signal. That being the case, the market looks very likely to find buyers in this region.
Where do we go?
To the upside, it’s very likely that the 1.37 level will be targeted, and possibly even higher. Remember, this pair does tend to move a little slower than others, so it’s a great pair for new traders, simply because it gives plenty of time to make a decision. The spreads are normally very reasonable, quite often in the neighborhood of about five pips. That being said, we are on the precipice of making a decision as to whether we will bounce towards the 1.37 level, or if we break down below the level significantly and go reaching towards 1.35 handle.