SGD/JPY 1H Chart: Channel Down

Following a five-week appreciation against the Japanese Yen that resulted in the formation of a rising wedge, the Singapore Dollar breached the given pattern to the downside. Consequently, the last wave downwards formed a short-term channel down in which the rate has been trading since. From theoretical point of view, the Singapore Dollar should make a retracement from the bottom wedge boundary prior to edging lower. This level intersects with the 200-hour SMA circa 81.90 and the upper channel line that is likely to function as a reversal point. From the downside, the pair is supported by the 100– and 55-hour SMAs at 81.72 and 81.62, accordingly. However, it is expected that the Singapore Dollar surpasses these levels and tries to test the bottom channel boundary in the 81.20/80.90 area.