Browse By

USDSGD technical analysis: consolidation, beats key support resistance

Technical picture of the USDSGD may be changing: After a decade-long bull run that sees the Singapore Dollar gain 54% against the US Dollar between 2001 and 2011, it moved into a sideway consolidation starting last year. Furthermore, bulls may see chance to for the pair to do a bullish reversal this year.

 

Singapore Dollar appreciates 54% between 2001 – 2011 against the US Dollar

In my posting ‘Besides Gold, Singapore Dollar has a decade-long bull run‘, I observed that the Singapore Dollar gained tremendously against US Dollar in the past decade. Apart from Singaporeans getting more purchasing power overseas, it is unclear if the appreciation has helped to stop imported inflation into resource dependent Singapore. Certainly Singapore tourism and manufacturing has become less competitive against neighbouring countries whose currencies have not appreciated as much. In a USDSGD chart, this appreciation shows up as a fall in the US Dollar.

 

USDSGD technical picture is now changing

The USDSGD did not fall further in 2012. In fact, light blue boxes that paints year highs and lows in the chart below show how the US Dollar – Singapore Dollar exchange rate is now moving both sideways and tightening at the same time. This is indication of a sideway consolidation.

What is more, the pair just tested and rebounded from a support resistance level at around 1.24 that has been an important feature since 2011. Price action in the last three weeks (Week 23 to Week 25) shows this testing clearly. By putting this support resistance behind, there is an opportunity for USDSGD bulls to buy the pair higher. Any price gains beyond 2012 highs will print a bullish reversal that may attract more buying action.

USDSGD weekly chart late-2008 to mid-2013

 

Summary

  1. USDSGD pair did not fall further in 2012
  2. Price movement between 2011 till date is sideway – tightening
  3. Price beats key 1.24 level, puts it behind, becomes support
  4. If price goes above 2012-high will print bullish reversal
7Shares

Director, TerraSeeds Market Technician Pte Ltd. Trader, investor. @sohtionghum was picked ‘Top 70 Forex Twitter in 2015’. Operates multiple strategies.

“Dear reader, I do not have a financial license to give advice. I do not know you the reader. Your financial objective and risk tolerance may be different from mine. I am not responsible for any consequence of your action.

Loading Facebook Comments ...

3 thoughts on “USDSGD technical analysis: consolidation, beats key support resistance”

  1. Helmy Hamzar says:

    thanks for the article Tiong Hum. I have been watching this pair for a while.
    I see :
    – the higher high and higher low in 2013
    – break of trendline across 2011 & 2012 high.

    Wouldn’t the above is also sign to be bullish? Of course, it needs to break 1.29-1.30 level.

    1. Soh Tiong Hum says:

      Hi Helmy, you are absolutely right.

      1. Higher higher and higher low in 2013 – done.
      2. Break trendline across 2011 & 2012 high – done also.

      Unfortunately until we see 2012 high clearly breached, this one is still a sideway consolidation. Even a triangle pattern can evolve into a horizontal channel.

      1. Helmy Hamzar says:

        okay. Thanks Tiong Hum!

Leave a Reply