Last month, we wrote an article suggesting the USD/SGD (Singapore dollar) downtrend may have ended at 1.2362 (https://www.fxstreet.com/analysis/daily-trading-analysis/2014/08/05) and provided a trade to buy USD/SGD. That trade's target of 1.25 was easily reached and price has since continued higher. We feel that uptrend is continuing and will recommend another long trade.
This twelve-hour chart (surprisingly) excludes any Elliott Wave count. Instead, it shows a pink downtrend line leading to the late July 1.2362 low and a subsequent blue channel higher. In the past two weeks, we've seen three touches of the upper boundary of the channel. The most recent touch occurred in the last twelve hours at 1.2701.
Price has started pulling back from that 1.27 high. An Elliott wave count from the 1.2362 low projects the current pullback (if it takes the form of an expanded flat) may find support between 1.2595 and 1.2625. Our entry for this trade will be based above the top of this support range (including an allowance for the spread) and our stop will be placed below the bottom of the range.
Therefore, we’d look to buy USD/SGD at (or below) 1.2640. Our stop will be at 1.2570. Given the 70 pip stop, our single target needs to be at least 70 pips above our entry. Therefore our reasonably conservative target for this trade is 1.2715, which is only 14 pips above the most recent high. In this way, we're looking for a retest of 1.27. Upside towards 1.28 may be feasible depending on where the pullback finds support.
Long Setup for USD/SGD
Trade: Buy at (or below) 1.2640.
Stop Loss: Place stop at 1.2570.
Take Profit: The ‘take profit’ target is 1.2715.
Trade Management: If price reaches 1.27 without triggering the entry, cancel all orders.
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