Dukascopy Bank Team
Dukascopy Bank SA
AUD/SGD 4H Chart: Channel Down
Comment: AUD/SGD bounced off of resistance at 1.0350 earlier this month, and since then the currency pair has been in a down-trend. As long as the descending resistance line at 1.0185 is intact, the outlook will be bearish. We expect the price to fall down to the 1.0050/30 area, where the lower edge of the pattern is reinforced by the weekly and monthly S1 levels.
However, there are arguments against the immediate sell-off. First, the four-hour technical indicators are mostly pointing north. Additionally, the SWFX market is overcrowded with bears—71% of positions are short. Above 1.0185 the Aussie will have a good opportunity to retest current December’s maximum.
EUR/AUD 4H Chart: Triangle
Comment: There seem to be more arguments to be bullish the Euro rather than the Aussie. One of the main reasons is a triangle, namely a continuation pattern, that has emerged after a rally. An additional argument is that the currency pair has recently broken through the 200-period SMA, implying that the single currency is set for long-term appreciation. If the price closes above 1.5174, potential obstacles will be at 1.5257/34 and at 1.5344/14, but over the next several weeks we may expect a recovery up to 1.5850. In the meantime, the SWFX market participants do not appear to be convinced by any of the arguments, being that 47% of them are currently long and 53% are short.
This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
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