With many forex traders extended their holidays throughout the Christmas period into the New Year, trading activity remains muted with lackluster volume. Economic reports over the next few trading session are expected to stir up volatility. Singapore reminded traders today that the global economic slowdown continues at an accelerated pace with a severe contraction in industrial production. The SGDJPY remained inside its horizontal resistance area, but where will price action be headed next? Today’s fundamental analysis will take a look at the upside potential as well as the downside risk in this currency pair.
The slowdown was also evident in the Japanese housing market, with a fall in housing starts greater than what economists anticipated. New construction orders also declined. The Japanese Yen tops the list of safe-haven currencies and forex traders may flock to it as more economic disappointments are released. Will the SGDJPY be forced into a retreat by bears or can bulls force a breakout? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Here is the key factor to keep in mind today for Singapore Dollar trades:
Singapore Industrial Production: Singapore Industrial Production for November decreased by 9.4% monthly and by 9.3% annualized. Economists predicted an increase of 1.1% and 0.8%. Forex traders can compare this to Singapore Industrial Production for October, which increased by 3.0% monthly and by 3.6% annualized.
Here is the key factor to keep in mind today for Japanese Yen trades:
Japanese Housing Starts and Construction Orders: Japanese Housing Starts for November decreased by 12.7% annualized. Economists predicted a decrease of 8.1%. Forex traders can compare this to Japanese Housing Starts for October, which decreased by 7.4% annualized. Construction Orders for November decreased by 1.2% annualized. Forex traders can compare this to Construction Orders for October, which increased by 6.4% annualized.
Should price action for the SGDJPY remain inside the or breakdown below the 80.550 to 81.100 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 80.800
- Take Profit Zone: 78.800 – 79.200
- Stop Loss Level: 81.550
Should price action for the SGDJPY breakout above 81.100 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 81.550
- Take Profit Zone: 82.450 – 82.800
- Stop Loss Level: 81.100
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