Whilst we’re not seeking large moves, there are two pairs which could be looking to take advantage of the dollar over the near-term; USD/JPY and USD/SGD.

USD/JPY has hit resistance around 108.50 with a bearish engulfing candle (making it a 2-bar reversal pattern near the highs). Whilst an against could be made that prices are trying to reverse against the trend, technically the trend remains bearish below the 109.32 high. So it’s interesting to see that RSI reached over 60 (to suggest overbought in a downtrend) and has now dipped lower to suggest a cycle high could be in place.

  • Regardless of whether this turns out to be a minor or major top, we favour a bearish scenario over the near-term.
  • Bears could look to target 107.2 support or fade into rallies beneath the 109.32 cycle high.
  • A break above 109.32 confirms a trend reversal on the daily chart.

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Since the prior analysis, USD/SGD has confirmed support at 1.3114/24 and mean reverted. It may be too soon to assume the correction is over and we’ve not yet seen prices the 38.2% retracement level, let alone the 50% or the resistance zone around 1.3825/36. So far, the move lower from the September high is similar to the fall form the May high, in which case we could still see a deeper retracement if ‘history is to rhyme’.

That said, prices are trying to push lower, so perhaps a bearish inside day from Monday could be something to consider trading if the reward to risk still allows, taking the 1.3114/24 support zone into account.

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DISCLAIMER: The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase of sale of any currency. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

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