AUD/SGD 1H Chart: Channel Up

The massive plunge of AUD/SGD on July 4 and its subsequent consolidation period is now followed by a relatively sharp upside movement that resulted in the formation of a channel up. The given up-trend remains solid and has even increased in strength since Tuesday. Technical indicators have reached the strongly bullish territory, signaling that the rate should edge lower in the upcoming hours. And given the small range, it is likely that this move breaches the bottom channel boundary. The scope of this fall, however, is unclear. By and large, it is possible that this reversal confirms the formation of a more senior channel, thus demonstrating a downside potential as low as the 1.0440/1.0400 area.