The Singapore Dollar is testing values that were traded in December of 2019, meaning the USD/SGD is within a price range experienced before global fears of coronavirus cascaded through the markets. The past three trading sessions for the USD/SGD have proven to be significant. During the middle of last week, the Singapore Dollar saw a strong bearish movement occur, which was promptly followed by a feverish bull reversal, only to see another move lower Thursday with an emphatic downward trend puncturing support.
As the new week begins the USD/SGD is sustaining its values well below the 1.36000 level, in fact, the mark now appears to be a higher target for resistance should another bull leg be demonstrated. Trading below the 1.35500 level has been sustained early today and the USD/SGD is certainly trading within depths that speculators will need to consider their perceptions wisely.
At first glance of a long term chart, traders might believe a retracement higher is likely. However, the bearish trend of the USD/SGD has been strong and while slight reversals higher will certainly occur, the bigger question is where risk-reward scenarios carry the biggest opportunity for a more definitive move near term.
If the USD/SGD continues to sustain its current lower values, technical traders who favor the bearish trend will likely note that in January of this year the forex pair did in fact trade lower than its current values. The USD/SGD accomplished this before the global implications of coronavirus knocked the markets backward. The USD continues to carry a weak outlook. Trader may be inclined to believe that the USD/SGD may find more momentum downwards.
The Singapore Dollar will likely find skeptics within its current values against the US Dollar. However, the Singapore Dollar may not be overvalued. Technically the USD/SGD looks like it may continue to trend lower too. The next level of support for the forex pair is 1.354000 which is close to its current price action. If this juncture can be broken lower it is conceivable the target of 1.35200 may prove important.
Traders need to be careful within the current price values of the USD/SGD. There are some speculators who may favor buying the USD/SGD and seek sudden reversals higher, believing a countermove will occur, but risk management will need to be wisely used and quick reactions might be needed to take advantage of this outlook.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.35600
Current Support: 1.354000
High Target: 1.35800
Low Target: 1.352000
