8 Hourly Chart
AUD/SGD broke away from 1.29, and trades around 1.295 currently as AUD/USD broke 1.05 this week. Bullish momentum from the low of 1st Jan ’13 does not appear to be losing steam, with price failing to establish any meaningful short-term pullback, with the largest decline within 2013 limited to around 50 pips.
From the weekly chart, Bulls will be glad that price managed to clear the resistance before entering the Overbought region, with historical levels suggesting that Overbought readings could go higher before we see potential pullbacks again. Using previous peak in Aug ’12 as reference, current trend could see Stochastic peaking around when price hits 1.32 as well. As we are using Weekly charts here, when this could occur might be a few months down the road. Along the way, we have RBA rates decisions in Feb, Mar and April, while MAS is scheduled to meet in April. Assuming that both Central Banks keep their reference rates on hold, as widely believed by analysts, this scenario supports a strengthening of AUD which may push AUD/SGD towards 1.32 until April where SGD strength may take over at least for the week of MAS announcement.
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