Keep in mind that this pair is slow-moving at times, so a little bit of patience will probably go a long way in this market.
The US dollar went back and forth on Monday as we are hanging about the area just above the 1.39 level. Ultimately, this is a market that I do think will go higher but the 1.40 level above is offering a little bit of psychological resistance. The market has been very bullish for quite some time, and it certainly looks as if it is only a matter of time before value hunters come back into this market and try to pick this market up.
If we were to break down below the 1.39 level, then we could go looking at the 1.38 handle. Ultimately, this is a market that continues to favor the greenback as most markets do, especially with Asia being a bit of a mess right now due to the supply chain issues out there. The Singaporean economy itself is levered to a lot of Asian business activity as it is essentially a banking hub for that part of the world. Having said that, anything that is not labeled “USD” is going to continue to look a little bit soft in this type of environment.
If we did break down below the 1.38 level, then it is possible we could go down to the 1.37 level, an area that had previously been resistant, and also where we have the 50-day EMA crossing at the moment. This is a situation where there are plenty of reasons to believe that the buyers are going to get involved. If we break it down below the 1.37 handle, it is possible that the market could break down, but that would take a Herculean shift in attitude. The Federal Reserve is likely to continue on its hawkish behavior, so it makes sense that the US dollar would strengthen. The market will continue to see a lot of volatility, and that is going to be the case in almost everything, but as long as we have a lot of “risk-off behavior” out there, the US dollar is typically favored over the Singaporean dollar. Keep in mind that this pair is slow-moving at times, so a little bit of patience will probably go a long way in this market. We have been in an uptrend for quite a while, but as you can see, a lot of candlesticks are small in range.