The USD/SGD has seen additional movement higher in early trading this morning, but has reversed slightly lower as financial institutions show their technical sentiment is being influenced by the 1.31000 level.
As of this writing the USD/SGD is near the 1.30920 mark with fast trading being seen. The 1.31000 level was a target driven by algo trading systems most likely early this morning and a high around 1.31135 was seen before being pushed back. Day traders who are hoping to ride the waves being created by financial institutions need to understand caution is taking hold of the broad global markets.
The ability to slam upwards and create this morning’s highs and then demonstrate a fast reversal lower, shows that volumes are large in the USD/SGD and outlook remains nervous. Yes, the currency pair remains in the lower realms of its mid-term range, but financial institutions are becoming increasingly anxious about their one and three month outlooks, this is likely causing speculative rumbling via cash forward positions.
Nervous Trading Yet a Limited Price Realm
While day traders may feel whipsawed by the recent volatility in the USD/SGD per their smaller positions which are likely using too much leverage, financial institutions are probably a bit more calm in the USD/SGD. If the currency pair can maintain a known price realm within the lower boundaries of its mid-term range larger players will likely stay more relaxed. Technical day traders may have the ability to catch momentum, but reversals may remain quick hitting and dangerous.
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U.S economic data will be relatively light this week. Some analysts may claim the weekly jobs change number from the U.S is important, but the Retail Sales statistics this Thursday and the Housing numbers will likely have an equally and potentially stronger affect. The U.S Fed interest rate outlook remains murky. Last week’s inflation numbers would seemingly allow for another 0.25 basis point cut in the Federal Funds Rate, but consensus seems to be split regarding what will happen. This murkiness regarding the U.S Fed is helping create choppy Forex and this includes the USD/SGD.
USD/SGD Short-Term Nervousness and Technical Movement
Conditions in the USD/SGD are likely to remain rather choppy in the short-term. If the USD/SGD can sustain value below the 1.31000 level, this may signal movements towards this ratio may run into some selling pressure.
- However, until the weekly jobs numbers and Retail Sales figures from the U.S are seen this Thursday, financial institutions will probably remain within a speculative dance that tests price levels programmed to pursue a realms that match a cautious outlook.
- The 1.30800 to 1.31000 levels in the short-term may remain active and fast.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.30950
Current Support: 1.30870
High Target: 1.31080
Low Target: 1.30725
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