Over the last several sessions, volatility has been quite high. However, the Forex markets don’t operate in a vacuum. What I mean by this is that although most of the markets might be choppy, there are always going to be trends that you can find. However, sometimes you have to look at the minor and exotic pairs in order to find a decent trade. In this sense, the market will often be difficult for those that refuse or are afraid of looking beyond the usual five or six pairs that grab all of the attention.
As far as the Singapore dollar is concerned, the market finds it to be a minor currency. Although it doesn’t come to mind immediately, the Sing dollar is popular enough to darner some attention. The currency is often a measure of Asian growth, as the banking industry in Singapore will finance a lot of the construction in Asia, especially Southeast Asia. Because of this, it is often used as a “proxy” currency for places such as Vietnam, Laos, Cambodia, etc. Also, it can be a bit of a safety currency as far as the region is concerned, so while you will see it fall in comparison to the larger currencies such as the US dollar and the Euro, you will see it do well against other neighbors such as the Vietnamese dong.
Looking at the charts, you can see that the US dollar has just broken above the 1.42 level to the Sing dollar. This is significant as it is an area that had been consolidation for some time several years ago. Market memory suggests that we will have to recognize the area again, and now that the resistance has been broken, it could very well become support. With this, we feel that the pair should now go to the 1.45 level next, and then perhaps much, much higher than that. Keep in mind that this pair typically grinds, so don’t expect explosive moves. On the other hand, in such a choppy environment as we have seen lately in the Forex markets, that might not be such a bad thing.