Aussie - Sing Dollar continues to channel lowerThe Australian dollar continues to fall against the Singapore dollar as we have developed a reasonably reliable downtrend channel. This makes a lot of sense, because the Singapore dollar is quite often used as a bit of a safety currency in Asia, while the Australian dollar is so highly levered to the Chinese mainland.
At this point, you can see that the 50 day EMA is just above recent trading, and we are testing the 61.8% Fibonacci retracement level. Ultimately, we are at roughly the middle of the down trending channel, so therefore it looks as if the channel will continue to hold going forward. With that in mind it’s very likely that we are probably going to reach towards the 0.9350 level, before bouncing again to find even more sellers.
It’s very likely that this pair will continue to drift lower until we get some type of resolution or at least serious progress to the US/China trade relations, or perhaps even signs of global growth. At this point it doesn’t seem like we are getting that anytime soon, at least not anything that you can hang your hat on. Because of this, we can simply extrapolate that every time this market rallies, you should be looking for signs of exhaustion to start selling.
The 0.95 level which coincides perfectly with the 50 day EMA will more than likely continue to offer resistance, just as a break down below the lows from last week opens the door to the previously mentioned 0.9350 level. All things being equal though, you should remember that this pair doesn’t necessarily move quickly, but rather steadily. That makes it a great longer-term trade as you can see. It is not until we break above the 0.9550 level that I would be concerned about the downtrend, and even then we would need to see a significant close above that level on the daily chart. As things stand, downward channel trading continues to work.
