Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Singapore Trade Balance for November came in at S$6.270B. Forex traders can compare this to the Singapore Balance for October, reported at S$6.506B. Non-oil exports for November rose by 0.3% monthly and 1.0% annualized. Economists predicted a rise of 0.2% and 2.3%. Forex traders can compare this to Non-Oil Exports for October, which increased by 5.7% monthly and contracted by 3.5% annualized.
The German IFO Business Climate Index for December is predicted at 87.8, the German IFO Current Assessment Index at 89.5, and the German IFO Expectations Index at 85.8. Forex traders can compare this to the German IFO Business Climate Index for November, reported at 87.3, the German IFO Current Assessment Index at 89.4, and the German IFO Expectations Index at 85.2.
The last full trading week of 2023 starts with a light economic calendar. Traders may attempt to extend existing trends and continue the Santa Clause rally that sent US equity markets to all-time highs as the US Federal Reserve announced three interest rate cuts in 2024. The current bullish sentiment could backfire, as the real economy, not the headline numbers, show struggling consumers, cautious corporate outlooks, high inflation, and a crackling labor market. While inflation dropped sharply, monthly indicators point towards a rise. Traders should also consider that moving from 3.0% to 2.0% is the toughest road for inflation and could take years.
Traders may pay close attention to the German Bundesbank Monthly Report, which covers economic issues, monetary policy, and financial and economic policy. Isabel Schnabel and Philip Lane, members of the Executive Board of the European Central Bank, will also speak. Given the lack of economic data, their speeches may attract more attention.
The forecast for the EUR/SGD is cautiously bearish after this currency pair advanced into its horizontal resistance area. Following a bearish crossover, the Kijun-sen and the Tenkan-sen have flatlined. The Ichimoku Kinko Hyo Cloud began to narrow with the Senkou Span B flat and the Senkou Span A moving lower. A bearish crossover could spark a massive sell-off. Traders should also monitor the CCI, which lost upside momentum following a double breakout from extreme oversold territory and above zero. A breakdown into negative territory may spark the next leg lower. Can bears regain control over the EUR/SGD and force price action into its horizontal support area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the EUR/SGD remain inside the or breakout above the 1.4530 to 1.4565 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 1.4545
- Take Profit Zone: 1.4380 – 1.4420
- Stop Loss Level: 1.4610
Should price action for the EUR/SGD breakdown below 1.4565, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 1.4610
- Take Profit Zone: 1.4680 – 1.4720
- Stop Loss Level: 1.4565
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