The only thing that you can count on these days is a lot of choppiness and volatility, as the market certainly seems to be on edge.
The US dollar initially tried to rally against the Singapore dollar on Friday but also gave up quite a bit of the gain to form a less-than-attractive candlestick. That being said, the market is likely to continue drifting lower, especially as we are seeing the US dollar sell off against quite a few currencies.
Part of the reason I think that we are starting to see the greenback lose strength is that a lot of traders are doubting whether or not the Federal Reserve will be able to raise interest rates as much as they say, so it is a bit of a backlash against the central bank. This is what makes trading so dangerous right now, because if they stick to their guns, traders are going to be caught on the opposite side. That being said, the 50-day EMA continues to be important, offering a bit of support just below current pricing. I think there is going to be a “zone of support” that extends down to the 200-day EMA just underneath, so do not be surprised if it gets a bit noisy in this area. By the time we break down below the 200-day EMA, I certainly believe that we will probably see more momentum to the downside.
On the upside, we could see the 1.36 level tested, but it is also where you would expect to see a bit of selling pressure as well. I think at this point, we simply go back and forth in this larger consolidation area that I have mapped out, and it is likely that we will continue to see a lot of noisy behavior, as we are getting close to the middle of it and essentially what you would consider being “fair value.”
The only thing that you can count on these days is a lot of choppiness and volatility, as the market certainly seems to be on edge. The Singapore dollar is a little bit more stable than some of the other currencies out there, but ultimately the US dollar is going to act like a wrecking ball to almost everything it touches if it strengthens, and that will not be any different here. Because just, but right now it looks like we are heading lower in the short term.