Experienced traders do not believe in coincidences. Their knowledge is based certainly on paranoia, perhaps even conspiracy theory, but also a strong dose of lessons learned while sometimes getting hammered when positions go wrong. However, in many cases, the paranoia and other theories are justified. The USD/SGD has demonstrated a powerful bearish trend and its value is challenging long term support, even if the Forex pair has gone higher this morning.
Yesterday, the USD/SGD approached the 1.34000 ratio and then displayed a rather quick reversal higher. Interestingly, the trading was not violent, and in the aftermath the Forex pair has been able to maintain a fairly stable price range still within the stronger boundaries of its recent price band it has accomplished. As of this morning in early trading, the USD/SGD has tested resistance, but it has not killed its bearish trend and speculators may be quite suspicious of its short-term rise.
The 1.34000 level proved to be a strong psychological inflection point for the USD/SGD on Wednesday and this is not a coincidence. Programmed trading rules Forex for the larger currency pairs, but human bias tends to make itself known; after all, it is humans who are programming the trading software. The 1.34000 level is an obvious pivot point for the USD/SGD and may continue to cause some volatile trading when the Forex pair nears the mark.
However, the USD/SGD’s bearish trend remains intact and speculators may continue to target lower prices with selling positions. While the USD/SGD traverses its short-term higher values, traders may prove inclined to wager that the Forex pair will not see a sustained trend upwards and will again prove that the Singapore dollar is a rather attractive currency.
Global risk appetite remains steady even as equity indices have taken a brief pause. There doesn’t seem to be a threat of a steep sell off near term – unless a black swan event were to unfold. Based on solid technical charts and a rather solid long-term trend, the USD/SGD looks to be a serious candidate to pursue downward price action near term, particularly as it tests its current ‘higher’ values in the midst of its slightly bullish trend. Selling the USD/SGD and looking for a reversal downwards seems the appropriate decision.
Singapore Dollar Short Term Outlook:
- Current Resistance: 1.34700
- Current Support: 1.34190
- High Target: 1.34810
- Low Target: 1.34000
