Market Strategy: FX Bull-Run Taking A Breather

The bull-run in Asia FX versus the US dollar could be on course for a breather. A tell-tale sign of this is the rather uninspiring performance of the Singapore dollar of late, which we view as a major bellwether of regional currency sentiment. Indeed, despite huge external surpluses suggesting long-term undervaluation, the Singapore dollar has started to show signs of technical weakness against the greenback in the past week, with triple negative divergence on the weekly chart suggesting that the recent correction may have legs. To be sure, a break through trendline support at SGD1.2100/US$ would confirm this for us

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