USD/SGD 1H Chart: Rate narrows trading range
NZD/JPY has been confined by a long-term channel against since November, 2016. Its trading range, however, has diminished substantially during the previous month. As a result, the pair has formed a wedge-like formation (dashed lines) which was drawn from two opposing trend-lines. Its bottom line was tested last week when the Kiwi reversed from the 1.3080 mark. It has since moved higher in a narrow channel up.
Technical indicators suggest that this pattern should be breached today, thus allowing the rate to approach the combined support of the 200– and 100-hour SMAs, the 23.60% Fibo retracement and the weekly PP in the 1.3180/67 territory. Given the strength of this cluster, the Kiwi could reverse near this territory and later test the upper trend-line and the 38.20% Fibo near 1.3280. Subsequently, the rate is expected to form a new wave down just to continue trading in line with the wedge.
Technical indicators suggest that this pattern should be breached today, thus allowing the rate to approach the combined support of the 200– and 100-hour SMAs, the 23.60% Fibo retracement and the weekly PP in the 1.3180/67 territory. Given the strength of this cluster, the Kiwi could reverse near this territory and later test the upper trend-line and the 38.20% Fibo near 1.3280. Subsequently, the rate is expected to form a new wave down just to continue trading in line with the wedge.