SGDAUD closes higher for the 3rd day in a row
Singapore Dollar/Australian Dollar (SGDAUD) Technical Analysis Report for Sep 16, 2020 | by Techniquant Editorial Team
Moving higher for the 3rd day in a row, SGDAUD finished Wednesday at 1.0075 gaining 13 pips (0.13%). Trading up to 25 pips lower after the open, the forex pair managed to reverse during the session as bulls took control ending the day above its opening price. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (SGDAUD as at Sep 16, 2020):
Wednesday's trading range has been 68 pips (0.68%), that's slightly below the last trading month's daily average range of 70 pips. Weekly volatility is also lower, being below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly higher than usual for SGDAUD. Prices continued to consolidate within a tight trading range between 1.0013 and 1.0103 where it has been caught now for the whole last trading week.
One bullish candlestick pattern matches today's price action, the Bullish Spinning Top.
The market managed to close back above the 20-day moving average at 1.0073 for the first time since September 8th. When this moving average was crossed above the last time on September 8th, SGDAUD actually lost -0.62% on the following trading day. Unable to break through the key technical resistance level at 1.0102 (R1), the FX pair closed below it after spiking up to 1.0103 earlier during the day. The failure to close above the resistance could increase that levels importance going forward.
Though the pair is experiencing a short-term uptrend, this might just be a correction, as both the medium and long-term trends are still bearish.
Buying could accelerate should prices move above the close-by swing high at 1.0144 where further buy stops might get triggered. Selling could speed up should prices move below the nearby swing low at 1.0017 where further sell stops might get activated. With prices trading close to this year's low at 0.9936, downside momentum could accelerate should SGD/AUD break out to new lows for the year.
Among the eight market conditions that our pattern recognition engine identified today, the statistics for the Price Action based market condition "Bullish Intraday Reversal" stand out. Although it is usually interpreted as bullish, it has actually shown to be bearish for SGD/AUD. Out of 450 times, SGDAUD closed lower 55.33% of the time on the next trading day after the market condition occurred.