USDSGD trade ideas
COT CURRENCY REPORTAUD, NZD & CAD:
The biggest mover among the three high beta majors was the CAD which showed a fairly big increase in net long positioning of +10K. What is even more interesting about this is that it occurred before the BOC meeting on Wednesday, which means this Friday’s data should show yet another big increase in positioning after the hawkish tilt from the BOC.
In terms of the AUD, positioning is back in negative territory after a -5K position change, fairly large and most likely due to the exacerbated downside we saw the AUD two weeks ago with the risk off flush in risk assets which hit the AUD much harder than it’s high beta counterparts.
This week will be fairly light on the data front for the CAD and NZD with CPI data in focus for the AUD. We would expect the CAD’s upward momentum to continue after the BOC’s meeting but as always external factors such as risk sentiment and oil will be important considerations.
JPY, CHF & USD:
US 10-year bond yields remains one of the key drivers for the USDJPY and a key asset to watch for the next direction of the pair. With the overall global risk outlook as well as the med-term bias for US10Y still tilted higher, we still expect USDJPY to drift higher and would keep a close eye on the price action for additional upside opportunities.
As for the Dollar, not much has changed. The med-term bias remains titled to the downside, and the move lower in US10Y has certainly also helped to push the greenback lower. This week we do have the upcoming FOMC meeting as well as Q1 GDP.
Even though markets are not expecting a lot from the FOMC there are a few caveats that could create some volatility in the Dollar.
GBP:
Sterling finally started to show more signs of life this past week, but once again did not manage to take advantage of that strength versus the EUR. The market’s continued expectations for a recovery narrative in the EU has continued to keep the EUR supported, alongside a continued push lower in the USD.
The fundamental outlook for the GBP remains unchanged, and with some of the upside positioning being unwound, we would expect the GBP to resume its med-term upside momentum. However, it does seem like markets might be waiting for a catalyst in the short-term to do so.
EUR:
Still the biggest net-long position among the majors. There are still issues surrounding the fundamental outlook for the single currency, but despite that the EUR has remained very well supported over the past few sessions as the Dollar has continued to lose favour.
The one positive though, and one of which a lot of participants are banking on right now, is that the vaccination roll out is gaining some positive momentum, and if the EU can reach some of the targets it has set itself then we could see a faster recovery in the EU.
However, when we compare that potential recovery in terms of growth or inflation differentials, or compared that from a monetary policy normalization point of view, it will still be far behind that of the US and the UK, which is why we are staying patient with our view on the EUR for now, waiting for more information before we change our mind.
*This report reflects the COT data updated until 20 April 2021.
COT CURRENCY REPORTAUD, NZD & CAD:
Positioning data for the AUD, NZD and CAD updated until the 13th of April still shows more room to run to the upside for the three high beta commodity-sensitive FX majors, even after the recent push higher in the likes of the NZD and AUD.
For this week the majority of the attention will turn towards the Canadian Dollar where we will have the BOC's policy and rate decision. Just two weeks ago the expectations that the BOC will look to start tapering their QE program was set in stone, but recent rising virus cases and lockdown restrictions has seen some participants push back these expectations.
Apart from that, the past few sessions the overall global risk outlook has been the main external driver for the AUD & NZD and without any major surprises we would expect the two antipodeans to be largely driven by the risk outlook.
JPY & CHF & USD:
With the US10Y pressured in the past week the JPY was quite resilient among major currencies despite overall positive risk tones. As yields find some equilibrium it will be interesting to see whether the JPY takes its cue more from risk sentiment in the weeks ahead as the strong inverse correlation between US10Y & JPY has been moving lower recently.
The USD once again saw downside despite further solid econ data and largely followed US10Y's path lower. However, it was quite noticeable that the Dollar didn't fall further on Thursday despite US10Y pushing lower with quite some pace.
Friday did see US10Y finding some reprieve alongside the USD. Even though the Dollar's med-term bias remains titled to the downside, we should keep in mind that yields have not been the only driver for the Dollar over the past few weeks as the overall reflation narrative remains a big focus as well.
As the USD's slide coincides with lots of exuberance in equities and VIX treading water on key support, we do need to keep a close eye on overall risk sentiment for some potential mean reversion at some stage, and if equities do have some short-term deleveraging it could see some USD safe haven flows.
GBP:
The two favourites among the FX majors from a fundamental outlook point of view has been the CAD and the GBP, and it's both of them that has been the weakest among the majors over the past two weeks.
Whenever we see price action like this we need to ask ourselves whether anything has changed that could jeopardize the fundamental outlook, and despite some initial concerns about the AstraZeneca vaccine, the main drivers for expecting further upside in the Pound is still intact.
However, we also don't want to catch falling knives. In the coming sessions, either waiting for price action to confirm the bullish trend is back in focus or waiting for a positive catalyst to driver the Pound higher seems like the best course of action in the short-term.
EUR:
The upside in the EUR this past two weeks has gone against the overall downside bias for the single currency which has been based on the EU's slower vaccine roll out; rise in virus cases; new lockdown restrictions; growth differentials; monetary policy expectations; and fiscal stimulus.
Some have argued that the big unwind in net long positioning over the past few weeks have seen the EUR reach an equilibrium as most of the negatives mentioned above should already be reflected in the price at this point. ING has also noted that there is a possibility that "traders wanting to jump in early on the EUR recovery story – more signs of which should emerge through the quarter as, for example, vaccination programs gain pace in the likes of France and Germany".
However, in our view it's far too early to be buying the EUR en masse in the hopes of an eventual catch up in vaccines and growth, especially on the growth side with the recovery fund yet to be ratified and large parts of the EU still under lockdowns while the UK and US is opening up.
But, as we noted last week, the sensitivity of the EUR to the Dollar also explains some of the upside in the EUR, and remains a key factor to watch in the week ahead.
*This report reflects the COT data updated until 13 April 2021.
Might see some bounce upwards...then heading down again...
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USDSGDHello Trader, Here is the market analysis for this pair, Let me know in the comment section below if you have any questions, The entry will be taken only if all rules of the strategies will be satisfied.
COT CURRENCY REPORTOverall:
With the CFTC data updated until 6 April the AUD showed the biggest decrease of (-8K) and the JPY showing the biggest increase of (+1K).
AUD, NZD & CAD:
Positioning data for the AUD, NZD and CAD updated until the 6th of April still shows more room to run to the upside for the three high beta commodity-sensitive FX majors, especially after the recent push lower in the likes of the NZD and AUD.
This week's upcoming RBNZ meeting is expected to largely be a non-event and should not have much to change the med-term outlook for the bank or the NZD. Some meaningful data to watch in the week ahead will be Aussie Jobs data as well as important Chinese growth data for the AUD.
As for the CAD, Friday's stellar jobs report should have solidified the market's expectations that the BOC will move forward with tapering QE at the April meeting, and should provide upside momentum for the currency running into the policy meeting.
JPY & CHF & USD:
The JPY saw a modest come back in positioning, which was to be expected as the currency saw a 96K positioning change going from a +29K net long to a -59K net short position in 6 short weeks. That registered as more than a 4 standard deviation move two weeks ago, and is still showing a -3.3 z-score on a 1-year look back with Friday's CFTC update.
The big driver for the JPY remains the US10Y, which means this week's upcoming US bond auctions (10- year and 30-year), as well as incoming CPI data will be very important for the US10Y and thus the JPY.
With yield differentials one of the key drivers* of the Dollar in recent weeks, the incoming US data points will be the main focus point for the greenback in the week ahead, alongside overall risk appetite as the better than expected US data and a sizable unwind of the Dollar's oversubscribed short bets have arguably turned the attention for the Dollar back to the med-term bias.
GBP:
The past few trading sessions have not been kind to the GBP, as short-term concerns about the Astrazeneca vaccine has weighed on the Pound. However, arguably the biggest driver for Sterling has been cross flows as EURGBP saw a sizable squeeze in the extended bearish trend.
Even though the bias for EURGBP remains titled lower in the med-term, any extended trend is always susceptible to violent squeeze when reaching key areas of support or resistance.
The challenge with a squeeze is that we don't know how long it will last, and with moves like these it's best to either wait for a new fresh bearish catalyst to use as a trigger for new shorting opportunities, or to wait for the pair to break back below key technicals levels with some follow through.
EUR:
The upside in the EUR this past week has gone against the overall downside bias for the single currency which has been based on the EU's slower vaccine roll out; rise in virus cases; new lockdown restrictions; growth differentials; monetary policy expectations; and fiscal stimulus.
Some have argued that the big unwind in net long positioning over the past few weeks have seen the EUR reach an equilibrium as most of the negatives mentioned above should already be reflected in the price at this point. ING has also noted that there is a possibility that "traders wanting to jump in early on the EUR recovery story – more signs of which should emerge through the quarter as, for example, vaccination programs gain pace in the likes of France and Germany".
However, in our view it's far too early to be buying the EUR en masse in the hopes of an eventual catch up in vaccines and growth, especially on the growth side with the recovery fund yet to be ratified and large parts of the EU still under lockdowns while the UK and US is opening up.
But, as we noted last week, the sensitivity of the EUR to the Dollar also explains some of the upside in the EUR, and remains a key factor to watch in the week ahead.
*This report reflects the COT data updated until 6 April 2021.
Week Ahead: COT Currency ReportOverall:
With the CFTC data updated until 30 March the EUR showed the biggest decrease of (-19.5K) and the AUD showing the biggest increase of (+6K).
AUD, NZD & CAD:
Positioning still favours further upside for the three high beta FX majors. The strong push higher in global equities last week is another positive catalyst to keep in mind in the week ahead.
Even though we maintain an upside bias for the AUD, NZD and CAD, but given the BOC's recent action to discontinue some of their market functioning programs and the complete reversal of NZ10Y after it's recent push lower we would prefer the NZD and CAD above the AUD as we also
have the RBA this week which could influence the AUD.
The med-term bias for all three remains titled higher.
JPY & CHF & USD:
The big deviation in positioning we mentioned in last week's report saw some mean reversion in the JPY albeit it only minor moves. With risk appetite taking a more positive turn at the latter part of last week, and with the solid economic data points from the US, the risk on added additional pressure on the JPY, but positioning still has some possible room left to unwind which is a risk to our medterm downside bias.
The Dollar's price action at the latter part of last week was very important. Despite the best ISM Mfg PMI since 1984 and despite a solid NFP print which came in much higher than expectations, the Dollar failed to sustain any meaningful upside, and instead continued it's overdue mean reversion to the downside.
This might be the first signal that the positioning-related squeeze might be fizzling out and could potentially be the market turning it's attention back to the reflation narrative as we head into the highly anticipated Q2 of 2021.
GBP:
The bias for Sterling remains firmly titled to the upside, we maintain an upside bias in GBPUSD, especially with the Dollar's soft price
action following last week's solid data points.
The calendar will be very light for Sterling, so the overall focus will arguably fall predominantly on price action in the EUR and the USD.
EUR:
The reasons to expect downside for the EUR has been on the rise recently. Whether we consider the vaccine roll out, or recent virus numbers, or lockdown restrictions, or relative growth dynamics, or policy normalization expectations, all the above point to further downside for the EUR versus the USD and GBP, as well as the high betas.
Despite shedding a lot of net long positioning in the past two months, the EUR remains the largest net long position among the majors, which means there is quite a bit of room to run to the downside if the above concerns continue to pressure the single currency.
However, the one caveat to the EUR is it's sensitivity to the Dollar. With the Dollar pushing lower we've seen the EUR breathe a sigh of relief, and as long as the Dollar remains pressured we could see the EUR gaining some upside momentum.
This report reflects the COT data updated until 30 Mar 2021.
Bullish PotentialPrice above baselines
Baseline signals long
Indicators signals long
MA within volatility range
USDSGD Time for bullish continuations
Hi traders:
Liking the price action on USDSGD to have a bullish continuation move.
We see price has formed a correction with a double bottom reversal price action.
LTF had a sharp impulse up, breaking out of the HTF correction.
We then see a LTF continuation correction in the making, and price is breaking out now.
Look for buy entries up to the next swing highs.
Thank you
USDSGD - LongDaily impulse higher, now we are seeing bullish pennant corrective pattern being broken higher
I expect a run up to previous highs if the USD keeps its strength
USDSGD IdeaOn the daily TF, we can see price being consolidated between strong areas: Middle BB and 150 EMA. We also see a descending triangle pattern and let's see which side price breakouts to.
Entry: price action bar in lower TF (1H / 4H).
It price breaks above, then we will likely be trailing the trade as trend has reversed.
If price breaks below, take profit target at Bottom BB.
Revisiting USDSGD after 12 months had passed.....In March 2020, we witnessed the peak of USDSGD at 1.464 price level and following , it went into the dark zone , battling 12 months of continuous selling until 4 March 2021 where it managed to see light at the end of the tunnel.
Now, we would like to see the price correct itself to 1.338 before we take a long position.
Of course, we congratulate the shortists who made good profits out of this 12 months of shorting !
USD/SGD (The further UPside ahead?)View On USD/SGD (15 MAR 2021)
USD price has been rising in the recent months and I see 1.336 as a good support.
As long as 1.336 region hold well, I expect it go go to 1.358 and may even go to 1.37 region.
DYODD, all the best and read the disclaimer too.
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Thank You!
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