The Singapore Dollar is a solid barometer of speculative sentiment in the global forex markets. The USD/SGD has enjoyed a solid bearish trend and late last week touched very important support levels near the 1.37000 level with an impressive display of momentum. However, upon traversing the lower depth of its range, the USD/SGD did reverse upwards temporarily.
The USD/SGD does remain within the stronger value bands of its bearish trend. The slight bullish reaction after testing important support was a predictable reaction. It seems likely a lot of buy orders were lurking at the 1.37000 juncture. The current trading environment sets up a good test for speculators who believe downside pressure will continue to develop, and the USD/SGD remains a candidate for selling positions. With support near the 1.37270 today, traders have an opportunity to test the waters and look for further bearish action.
The USD/SGD has seen some selling this morning and its current values near the 1.37500 level could prove to be an inflection point. If the value of the USD/SGD sustains its current pace and pushes lower on selling, speculators may perceive the slightly bullish reversal yesterday which tested resistance was a short term reaction and can be dismissed.
Resistance does look strong near the 1.37750 level and interestingly, there has been an incremental decline in resistance levels for the USD/SGD the past month which also adds to the perception that selling pressure will continue to be seen within this forex pair. The Singapore Dollar is a solid expression of global risk appetite. Singapore is an international financial center and an important component in Asian commerce. The US Dollar has exhibited plenty of weakness recently against many major currencies and the Singapore Dollar may prove it will continue to benefit from this trend.
Short term speculators should continue to look for downside momentum, patience is needed and risk management is important. Within the vicinity of 1.37550 to 1.376000 limit orders seeking to sell the USD/SGD looks appealing via technical charts.
Plenty of concerns regarding the ability of risk appetite to sustain its momentum in the global equity markets exists, but the trend should be followed. Yes, you could speculate with a buying position of the USD/SGD around the 1.37400 level and look for upside action, but risk-reward scenarios currently appear to favor selling this forex pair.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.37750
Current Support: 1.37270
High Target: 1.37880
Low Target: 1.37000
