AUD/SGD has been dominated by a flat descending channel since late September, 2016. The pair’s last wave down in this pattern has been stranded in two additional channels. As apparent on the hourly chart, the Aussie still falls short from the bottom boundary of the senior channel near 1.0140/60; thus, there is still some downside potential. The monthly S2 at 1.0222 has halted the rate on two separate occasions during the past week. This factor, together with neutral technical indicators, suggest that the strong bearish sentiment might have allayed, thus giving bulls an opportunity to take the upper hand in the nearest time. Given the fact that the pair has been confined in a narrow range between the monthly S2 and the 55-hour SMA, no significant changes might occur during this session (in case the RBA Governor Philip Lowe does not shake the market dramatically). Subsequently, appreciation is expected to follow.
