The USD/SGD bearish trend resumed soundly the past two days of trading and is again approaching critical support junctures. The 1.36500 level could prove to be a vital inflection point and cause skeptics to consider speculative buying positions. However, going against the strength of a solid mid-term selling trend may prove to be a costly mistake if a trader is not fast enough to cash out of a position which is trying to search for upwards movements when technical momentum is in the opposite direction.
The current price action of the USD/SGD is within an important battleground. The reason why this is said is because the value of the Singapore Dollar is approaching levels it has not traversed since late January. If the selling of the USD/SGD persists and support can be broken around the 1.36500 level, the next major target would be 1.36450. However, before the USD/SGD can challenge those levels it must first sustain its value band and prove it can withstand reversals higher.
Late last week the USD/SGD did begin to approach the 1.36500 juncture, but then experienced a sharp and volatile buying surge which took the forex pair all the way up to 1.37340. This recent history should be enough to give speculators some concerns about the ability of the Singapore Dollar to sustain bearish momentum within these price vicinities.
Yesterday proved to be a strong day for global risk appetite and this certainly helped spur on the selling of the US Dollar against many major currencies in forex. While the sentiment remains bullish on global equity indices, traders should also note that the weather in the US could dampen short term optimism and bring safe-haven investors to the forefront. The reason for this is the hurricane which is approaching the Gulf Coast in the United States. Trading may be a bit conservative today and tomorrow depending on the developments surrounding the potential storm surge.
This raises the short term possibility the USD/SGD may find some buyers even in the midst of a strong mid-term bearish trend, meaning that sellers of the USD/SGD should be on the alert for the potential of a reversal higher the next two days of trading. Courageous speculators may want to attempt a buying position of the USD/SGD around its current price levels of 1.36580 to 1.36640 and place a stop loss near the 1.36500 mark.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.36730
Current Support: 1.36530
High Target: 1.36850
Low Target: 1.36270
