ANALYSIS | 37 minutes ago
EUR/SGD and USD/SGD: Trade Ideas
EUR/SGD from current price at 1.5384 is not only fast approaching bottoms but massive price pressures are building inside current prices. The next big support below lies at 1.5308 but don’t expect price to reach 1.5308 nor hold should a market fluke take price to those lower levels. Why EUR/SGD price pressures is due to Correlations to EUR/USD at 32% and 0.02% V USD/SGD which is correct.
To relieve price pressures, EUR/SGD must travel higher. Problem is at current 1.5384, vital breaks just occurred at 1.5412 and 1.5442. Viewed from USD/SGD, current price must trade inside at least 1.5387 to range between 1.5387 to 1.5448. Above 1.5448 then ranges and upper target becomes 1.5509 t0 1.5448. Watch 1.5412 on the way up. EUR/SGD is in a tough situation as price below 1.5387 is out of bounds and 1.5509 is also out of bounds so range is 1.5387 to 1.5509 with breaks at 1.5412 and 1.5448.
USD/SGD is oversold both long, short terms and intraday. From current price at 1.3812, next vital supports below are located at 1.3780, 1.3740, 1.3709 and 1.3638.
Big floor and range bottoms exist at 1.3638 and 1.3633. What both points means is breaks open downside flood gates to 1.3484. Points above lie at 1.3970 and 1.3989 and further out 1.4208.
USD/SGD should trade between 1.3633 to 1.3927 with breaks in between at 1.3780. At 1.3812, ranges become 1.3780 to 1.3927.
Common theme running through ZAR, SGD, HUF is the USD V EUR relationship is causing problems inside the home nation currency pairs. For USD/SGD, price is oversold but EUR/SGD can’t handle downside price moves. USD or EUR must move to align the home nation currency pairs.
Why SGD is vital to the world is not only is it a vital money center location for Asia but many nations such as Japan list securities on SGD exchanges. The other part of the conundrum is markets severely lack volatility.
A misaligned currency pair in price and correlations once aligned in lightening speed. Today, misalignments remain to the point when price is ready for explosion such as EUR/SGD. EUR/SGD is not just ready and must move but its ready to explode from its present location. If blame was placed inside the EUR V USD problem then DXY for the past two months ranged between 93 to 95 with hope and promise of a Fed rise.
Brian Twomey, Inside the Currency Market, btwomey.com