As of this morning, the USD/SGD is essentially testing values not demonstrated since November of 2020. The Forex pair has shown the ability to consistently break through resistance and its current price near the 1.35500 juncture should be looked at carefully. Bearish speculators may still be latching onto the belief that the USD/SGD is overbought, but being stubborn and continuing to pursue selling positions may be proving an extremely costly endeavor.
The trend higher in the USD/SGD showed some potential to slow down last week, but yesterday’s price action once again saw ignition of bullish sentiment when U.S inflation data and a report from the New York Federal Reserve likely stirred nervousness. Bullish speculators who are comfortable pursuing the upwards movement cannot be faulted, but they should not get overconfident and remain vigilant regarding the use of solid risk-taking tactics.
If the current price ratio of the USD/SGD is able to sustain within these higher depths, traders may begin to target junctures that have not been sincerely exhibited since late October and early November of 2020. Bullish traders are urged not to become overly greedy and use appropriate take-profit targets.
While aiming for the 1.36000 mark may seem very attractive as a potential goal, it could prove to be difficult to attain. That is not to say it will not happen, but even if the USD/SGD’s strong bullish sentiment plays out in the short term, reversals lower and tests regarding the amount of leverage being used by short-term speculators is likely to make pursuing these lofty heights a dangerous adventure.
A more realistic trading strategy may be to wait for slightly lower moves which test current support rations and look for polite gains with tight take-profit targets via the USD/SGD choosing nearby resistance levels. If a speculator has enough fortitude to go against the current trend, this could prove to be an intriguing contrarian position too, but must be acknowledged as a definite wager.
Yes, the USD/SGD does look over-valued, and short-term behavioral sentiment may reverse quickly. However, selling the USD/SGD within the current conditions should be done using tight stop-loss ratios. The USD/SGD is certainly going to test the technical perceptions of short-term traders who may have to alter their viewpoints as they participate within this challenging range.
Singapore Dollar Short-Term Outlook:
Current Resistance: 1.35660
Current Support: 1.35330
High Target: 1.35900
Low Target: 1.34950
