The USD/SGD saw more bullish action early today, but has come off of short term highs as forex reacts to nervous market conditions.
The USD/SGD has broken through short term resistance levels and challenged the 1.37200 juncture in early trading this morning. Global market conditions are nervous after another negative day from US equity indices on Tuesday. Asian stock exchanges have mirrored the declines today and risk appetite has produced clears signs of becoming risk adverse. The question speculators are pondering is how long this apparent rise of risk adverse trading will last?
Although positive investment sentiment has certainly been demonstrated the past six months, traders who win and lose via short term endeavors will need to figure out where momentum will establish the next trend. It is vital for speculators not to overreact when market conditions turn nervous and go against their perceptions, but it is equally important to acknowledge conditions in forex may be suddenly changing and judge their trading opportunities with open eyes.
The results from the USD/SGD highlight the short term strife which has developed in forex. The USD/SGD has had bullish sentiment carry it higher since early September and demonstrated an ability to move quickly. The 1.37000 vicinity could prove important short term. If the Singapore Dollar remains above this level speculators may continue to look for higher targets. After challenging the 1.37200 mark earlier today, the USD/SGD did trend lower, but the forex pair has stagnated above the psychologically important 1.37000 level via current price action.
Speculators should consider using limit orders and trying to capture momentum when pursuing the USD/SGD near term. The 1.37100 level may be an interesting juncture to buy the USD/SGD and target the 1.37250 mark. Traders who believe bearish sentiment will be demonstrated again may want to be sellers around the 1.36950 mark and seek the 1.36800 level.
The USD/SGD is typically a polite forex pair to trade with limited volatility. However, trading the past couple of sessions has seen dynamic action as resistance levels have proven to be vulnerable short term. Risk reward scenarios are difficult to predict due to current market conditions and until US equity indices show signs of positive price action, speculators should anticipate risk adverse trading to prevail in forex, which means buying the USD/SGD short term may be the right choice.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.37260
Current Support: 1.36850
High Target: 1.37410
Low Target: 1.36760
