Category Archives: News

Singapore the Asian Forex Hub

A recent survey conducted by the Bank of International Settlements indicates that Singapore usurped Japan as the biggest foreign exchange centre in Asia. Data from the Monetary Authority of Singapore (MAS) cites an average daily foreign exchange volume of $4.53 billion SGD, placing Singapore at the forefront of Asian FX Trading.

The fund management industry provides a financial backbone with over 500 asset managers who oversee approximately US $1.1 trillion. Financial providers are setting up to service increasing trading demand including IG.

Externally the city-state maximises its Asian geographical advantage via shipping. The PSA shipping terminals represent the busiest transhipment hub in the world, connecting to every major port in the world. Shipping forms both an economic and physical connection across the Asian space, supporting booming exports.

The current Trade Surplus of 4.53 billion SGD is supplemented by 9.5% growth in the export industry to 45.4 billion SGD. As a net exporter Singapore has ultimately become a net investor in rest of world markets, building sensitivity towards global economics.

This exposure is prevalent in the last 3 months with a 2.2% SGD drop against the US dollar. CIMB regional economist Seng Wun Song re-enforces the correlation between growth and economic events “there is growth in the Singapore economy – it’s just not in the straight line we’d hoped for and that’s partly due to worries about the impact of Fed tapering, the strength of the rebound in China and the impact of currency weakness in neighbouring Asian Countries.”

FX strategist Sim Mon Siong, Bank of Singapore further identifies the potential impact of US tapering stating that “the market has kind of re-priced the tapering expectations with the data opening the possibility that tapering could take place much sooner than the March consensus.”

In contrast increased partnership with China and the Renminbi is strengthening Singaporean infrastructure. MAS stated that the countries have agreed a 50 billion Yuan quota for Singapore financial institutions to invest in China’s domestic securities.
The recent introduction of direct currency trading between both countries will likely decrease conversion costs between SGD and RNB, supporting trading partnerships and mutual investments. Direct trading is triggering market speculation that Singapore could be a future “hub for the Yuan”.

NZDJPY 240 min

Median Line Analysis using pitchforks is a methodology that allows us to predict areas or lines of support and resistance with extreme accuracy.  It sounds simple, but the key to the analysis is correctly finding the path of price. By using the lines of the pitchfork and watching the strengthening and weakening of trend along these lines we are able to gauge the likely supports and resistances along this path of price. With tight stops and proper money management numerous significant trades may be taken as price moves along a path that often seems pre-ordained.

NZDJPY 240 minute chart 20131030

The first thing to note on this NZDJPY 240 is how in the blue circles along the red Sliding Parallel resistance turned into support. This tells us that price is likely to move to the upside and indeed it does, finding resistance at an area of prior resistance along the blue Upper Quartile in the red circles.

From there price moves higher before topping at the Upper Parallel in the green circle. The fact that price then falls back and cannot reach the Upper Parallel again tells us that it is running out of steam. We find resistance emerging once more along the Upper Quartile as shown by more red circles. Furthermore not only is the ceiling lowering, but the floor is lowering too. Support is showing up at lower levels in the fork. What was once support along the blue Sliding Parallels becomes resistance and price moves lower. Another way of looking at this formation is as a head and shoulders along the line of the fork with the green circle being the head and the red circles the shoulders

Price is currently between support along the Lower Parallel (prior support) and resistance under the red Sliding Parallel. We will continue to monitor this strengthening and weakening of price along the lines of the pitchfork. Once again finding the path of price is an essential part of Median Line Analysis and we will look to take trades in accordance with the lines of support and resistance that are revealed.

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A key line of resistance for the Euro in the 1.3070s?

I posted an alert on Wednesday (at 1 on the chart) that I felt the Euro and British Pound were in line for a bounce, with the Euro trading at 1.35 and the Pound at 1.5920. the Euro returned to support (2) andas of yesterday morning each had bounced nicely. During this move up from support I drew in the blue lines and indicated that I was watching for a move up to resistance (3 in the chart below). It worked nicely, the Euro rose overnight and hit the line AND rejected from it.


What are we to read from this? Two things, first the line IS active. Second, until we breach it, exercise caution. The line is currently in the 1.3570s but sloping down through time. Until we print in the 1.3080s I expect a move lower.

Those trading long at my support and switching to short at resistance would be looking at 90 pips profit thus far.