USD/SGD – Weekly Candle Chart 2nd March 2009

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USD/SGD Weekly Candle Chart - 2nd March 2009

USD/SGD Weekly Candle Chart - 2nd March 2009

Sometimes when we are analysing charts we tend to forget some of the basics, so I thought I would show you a great chart this morning which I hope demonstrates the point. The chart we are looking at is the weekly for the US dollar and Singapore dollar, not one I trade very often, but it does illustrate the point, which is simply this – with the wide spread up bar from last week, and clear breakout above the resistance at 1.5300, we should be very confident that a long position should make us money in the next few days as all the signals are good. First we have strong up candles with wide spreads indicating momentum in the move. Secondly we have a support area immediately below providing protection in the event of any reversal, and finally we have all three moving averages pointing higher. All these factors illustrate the point that Japanese candlestick analysis only works when combined with Western indicators, a fact we often forget in our analysis. I just wanted to remind you in case you had forgotten!!

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