Did SGD get weaker?

 I did a piece on Malaysia titled On the road to radicalization under the leadership of Anwar Ibrahim on 28th October 2023. I was negative on its overwhelming support for Hamas as I feel that the direction it took is not conducive to the progress of the country. It is an act of the prime minister to redirect the people away from the governance incompetence of his government.

MYR indeed weakened on the week that followed, but also created a potential reversal signal. MYR further strengthened against both SGD and USD the subsequent week. I was anxious with the new development. Was I wrong in my analysis?

My first reaction was to change my position, after all, it did seem like a trend reversal. 

However, there is something in me telling me to hold off my decision, patience!

First off, the changes seem impulsive, and market may be reacting too some surprises. What I found an article on USD titled US Dollar Drops Sharply As Weak Data Puts Recession Fears In Focus. 

It probably spooked the market and lead to a plunge in USD. On the other hand, it made MYR seemingly strengthen against USD. However, it did not explain why it also strengthened against SGD. 

In the end, there are many things on the world that I cannot explain, and it worthwhile not to pursue this route. Further more, it may lead to a subjective misread on my charts. 

So another week has past and I  felt may be there is enough bars to see if SGD has indeed weakened against MYR.

Fig 1. SGDMYR weekly chart

SGDMYR actually broke through the previous high of 3.4938 before it retreated from the new high of 3.5166. It fell to 3.4164 before closing above the 21-week moving average. The downtrend is relatively weak with such a long tail. 

Further to that, the bodies of the bars overlapped during this down trend. it is a kind of indication that there is hesitation in its move and SGDMYR is possibly in a correction phase. 

A harami is formed with this week's movement closing above the 8-week moving average. Dow it mean that it is reversing again? It is a possibility, but there is a need for confirmation bar.

It is still possible for SGDMYR for further downslide, with the urge for the chart to touch its 55-week moving averge and the 100% projection support level of 3.37.  

What is the upside? 

If we are seeing continuation at the point of time, we should still be seeing 3.6225 after retesting 3.5176.

However, it is only a comparison between SGD and MYR. What about SGD itself?

Fig 2. SGD weekly chart

In my last update on SGD in Oil creeping up? I estimated strengthening of SGD against USD as the pair was touching the 55-week moving average. It did not.

Instead, USD strengthened further against SGD peaking at 1.3763. Coincidentally, this is the 100% projection resistance of its minor move. 

It did reverse down there after.

The weakness in the US market brought USD back below the moving averages, which also support further down trend. In addition, the MACD has also crossed downward, further supporting the notion of further downslide.

While the bars also overlapping which for me is indication of counterwave, it seems there is stronger momentum to go further south. 

However, there are a few support levels that is crucial for this trend.

First off, the previous low of 3.1723.  Crossing this level will give a clearer indication of its direction. Below it is 1.30320, which is the low of 29th January 2023, reversal of the previous down trend.

The other levels will be the major projection support between 1.228862 to 1.285007. 

Fig 3. Crude Oil Light weekly chart

With stronger SGD against USD, one other chart that I will look into is crude oil, which was the original intention of this entry. I noticed recently that the petrol price came down while I was pumping fuel to my car, it is worthwhile checking up on.

In my last analysis Oil creeping up?, Crude oil was congesting. I placed 2 scenarios over where it may be going. On the upside, I have placed the range of 92.34 to 94.746 as its resistance. 

Oil peaked at 95.03 before reversing.

It has since broken through the moving averages this week below the 144-week moving average of 77.78, closing at 75.84.

I suspect that Crude oil may retest its moving averages not limiting to that of 144, 89 and 55 before continuation.

From Fibonacci standpoint, the next level of support is its 61.8% projection support at 53.71. However, another support level worth noting is the previous low of 63.64, which may cause crude oil to reverse. 

If oil manage to break through these levels, then the 100% projection support at 28.17 is a possibility. 

Now it is a little too far fetch, isn't it? How can oil hit this low in midst of such world turbulence? There are already wars on 2 fronts and threat of more happening in the East. Should China not able to handle its internal issue, it will externalize its problem by attacking Taiwan. By then USA will be spread too thin to battle on 3 fronts. These are potential for inflation so how is it possible for oil to go down?

Well, oil has gone negative before, bottomed at -40.32, so 28.17 will still be a possibility.

If, however, Crude oil can hold fast at its 61.8% projection support, we may then witness a surge upward with target of between 169.21 to 234.46. As a consumer, I don't find this appealing.