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USD/SGD Key Reversal Day Heralds Rebound

Currencies / Forex Trading Jun 05, 2009 - 11:41 AM GMT

By: Seven_Days_Ahead

Currencies

Best Financial Markets Analysis ArticleThe Daily charts of the markets we follow in the FX TRADING GUIDE are littered with Key Reversal Days and Almost-Key Reversal Days from earlier this week. We’ll be looking at all of these in next week’s Guide, but here we have chosen USD/SGD as an example – rebound is on the cards.


The FX Trader’s view

 

MONTHLY CHART:

Recovery from the 2008 low eventually neared a 61.8% level before pulling back.

 

We had been uncertain whether the 1.4153 Dec-08 low would be retested and, currently, support could emerge above this, just ahead of the 61.8% retracement – see Daily chart below….

 

 

DAILY CHART:

The recent break below the bull channel base projection had kept us bearish – we were looking at a Fibo projection at 1.4235, around the 61.8% level on the longer term chart.

However, in this week’s Guide we had noted the positive divergence on the RSI, indicating bull fatigue.

Wed’s Key Reversal Day, coupled with how the chart structure looks since 1.4747 18-May high (typical of a final leg), improves the scope for a rebound now.

Keep in mind the usual retracement levels as potential  resistance – 23.6% at 1.4620 and the 38.2% at 1.4805, with that 1.4747 high also offering a s/term hurdle. This bull scenario would be negated by a move below the 1.4324 03-Jun low. Buyers on dips (1.4450-1.4400 area?) have a clear risk level in the 1.4324 low, initially targeting around 1.4600 for partial profits, and then the 1.4745-1.4800 area for more, raising stops to at least cost along the way.

 

Philip Allwright

By Mark Sturdy
Seven Days Ahead
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Mark Sturdy, John Lewis & Philip Allwright, write exclusively for Seven Days Ahead a regulated financial advisor selling professional-level technical and macro analysis and high-performing trade recommendations with detailed risk control for banks, hedge funds, and expert private investors around the world. Check out our subscriptions.

© 2009 Copyright Seven Days Ahead - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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