Trade Recommendation: CAD/SGD
The Canadian Dollar/Singapore Dollar pair (CAD/SGD) started its downtrend in August 2010 when it took out support of 1.30. This triggered the large head and shoulders pattern on the monthly chart. The breakout led to a waterfall event that saw the pair drop to as low as 0.98079 in January 2016. In five and a half years, the Canadian Dollar lost almost 25% of its value against the Singapore Dollar.
At this point, CAD/SGD began to build a base at 1.02. The pair consolidated for about a year and a half. It then showed signs of life in the third quarter of 2017 when it went as high as 1.11455. The market has been dropping since but this could be your chance to buy the bottom.
Technical analysis reveal that CAD/SGD appears to have recovered from a false breakdown of 1.02 support. The recovery was affirmed by a strong rally to 1.05154 in May 2018. While the pair pulled back, bulls responded by confirming the 1.02 support with a bullish pin bar. In addition, the 4-day, 8-day, and 21-day moving averages are all detached from the weekly candle. This is a hint that a bounce is on the horizon.
The strategy is to buy as close to 1.02 support as possible. As long as bulls preserve this support, they will ignite a rally to our target of 1.10.
The process may take more than three months.
Weekly Chart of Canadian Dollar/Singapore Dollar on OANDA
As of this writing, the Canadian Dollar/Singapore Dollar pair (CAD/SGD) is trading at 1.02311 on OANDA.
Summary of Strategy
Buy: As close to 1.02 support as possible.
Stop: Close below 1.015.
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