The USD/SGD is near the 1.34190 ratio as of this writing, this is a stark contrast to the 1.35850 vicinity seen last week. The downwards trend of the USD/SGD since last Wednesday is correlating to the broad Forex market. Friday’s lows of nearly 1.33830 were challenged again yesterday. However, because Forex volume was lighter than normal on Monday, results from today are more viable.
While there was a slight climb early this morning in the USD/SGD, the ability of the currency pair to maintain its lower near-term realm reflects a possible shift in sentiment starting to occur in Forex. USD centric risk adverse buying seems to have run into a roadblock recently. Yes, there will certainly be other headwinds created by President Trump which will affect behavioral sentiment in financial institutions, but it is possible large traders are starting to become calm.
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Support and USD/SGD Speculation Near-Term
The USD/SGD does have the capability to create price velocity which is fast. Yesterday’s lack of volume due to the absence of U.S institutions in Forex will see a change in the coming hours. This means the USD/SGD will start to be confronted by the potential of choppiness. However, if the USD/SGD remains within sight of its lower realms, financial institutions which have believed the currency pair has been overbought may believe the 1.34000 is a legitimate target.
Day traders cannot get too ambitious. Speculators must be content with quick hitting trades and cashing out profits when they materialize. The consideration that mid-term outlooks for the USD/SGD are becoming more optimistic from a bearish perspective is still yet to be proven. The downwards track of the SGD/USD since the very nervous highs from the 3rd of February when the 1.36900 ratio was hit shows that financial institutions have regained some confidence. Support around the 1.34000 may become a major catalyst near-term.
U.S Economic Data Still Remains Sidelined
Even as the U.S produced higher than expected inflation data last week, the USD/SGD continued to show a downtrend. The ability in broad Forex to see a weakening of the USD is important, but traders should not get too comfortable yet.
- There will be a lack of key economic data from the U.S this week.
- If last week’s stronger than anticipated inflation numbers via the Consumer Price Index and Produce Price Index statistics did not scare sellers of the USD, coming data will not either.
- It is a question of behavioral sentiment and finding out how much risk premium has been factored into the USD/SGD, and how much more still exists which can be taken advantage of by pursuing short positions.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.34230
Current Support: 1.34150
High Target: 1.34390
Low Target: 1.34075
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