For the past week we have seen a drop in the value of USDSGD following on from a harmonic pattern. The AB, BC and CD leg have formed the first 3 waves and after the recent reversal, we have seen an over extended move below the wedge to hit a new low last seen in September 2016.
If we see the price reverse from this or a slightly lower price point and then a move back into the wedge and closes within it, we could see a further move upwards up to the top side of the wedge pattern. As the price is currently hitting lows not seen for a few months, a trade should only be entered after the price closes back in the wedge as there could still be a good chance the price will continue to fall if the USD weakness continues.
If we see the price reverse from this or a slightly lower price point and then a move back into the wedge and closes within it, we could see a further move upwards up to the top side of the wedge pattern. As the price is currently hitting lows not seen for a few months, a trade should only be entered after the price closes back in the wedge as there could still be a good chance the price will continue to fall if the USD weakness continues.