© Dukascopy Bank SA
Although USD/SGD has already breached the rising wedge to the downside, the formation has not yet realised its full bearish potential—the price has only reached its first target.
Accordingly, after a short reprieve the sell-off is likely to resume, pushing the exchange rate through the 200-period SMA down to 1.2485, where lies the origin of the pattern. For this to happen the currency pair should not rise beyond the resistance line at 1.2711, which is strengthened by the weekly R1 level. The SWFX market participants are also preparing for a decline in the U.S. Dollar's value—71% of them are presently holding short positions.
© Dukascopy Bank SA