According to USDSGD the USD is correcting retracing only

USD rally not over yet

USDSGD is a pair I like. Not really a major pair, not a minor pair either. Does it move? Quite a bit but not as jumpy as other pairs like the way EURUSD and USDJPY respond to ‘high impact news’.

I don’t see many news as truly high impact if we evaluate them according to follow through. Truly high impact news are followed through; most news these days results in momentary spikes but settle down unchanged almost immediately. The way pairs like EURUSD and USDJPY jump around even to non-high impact news are quite a pain.

Therefore I see USDSGD as a steady, not noisy pair for directional play on USD.

Features of USDSGD

  1. Displays good price movement.
  2. Not jumpy and therefore not noisy.
  3. Tracks DXY closely.
USDSGD daily chart YTD

USDSGD daily chart YTD | Source: Tradingview

Key question: Is price action in the blue bubble printing a bearish reversal pattern? 

Common reversal patterns can be found here.

If answer is yes, then USDSGD could be reversing which implies that USD rally since beginning of April is over.

  • Does the price action in the blue bubble look like a Double Top? No.
  • Does the price action in the blue bubble look like a Triple Top? No.
  • Does the price action in the blue bubble look like a Head and Shoulders? No.
  • If there a blow-off top, buying climax or wash n rinse? No.

I think the answer is no or at least not at this moment.

USDSGD is not printing a bearish reversal at this moment. USDSGD looks like it might be printing a 1-2-3-4 bullish continuation setup. Something resembling what happened between May – June.

If USDSGD is indeed looking for support with another point 4 test, then the following might be true.

  • Potential support could come in anywhere from here to previous May high (previous points 1 and 3).
  • Any short between here and there could be a short term counter trend move only.

I prefer to wait for a support to show in order to long point 4. In the meantime, look at USDCHF and USDCNH. These pairs also do not resemble common bearish reversal patterns. In fact they both resemble price action building up for bullish continuation i.e. all pointing to USD still strengthening.

USDCNH H4 chart in barchart and zigzag setup

USDCNH H4 chart in barchart and zigzag setup

See this H4 chart of USDCNH↑. Does this look like a reversal pattern?

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