The USD/SGD has mirrored other major currency pairs in the past twelve hours, after a wave of selling was stopped by U.S Fed policy rhetoric and a reversal higher ensued.
The USD/SGD is near slightly below the 1.41750 realm as of this writing. Last night the USD/SGD currency pair touched key support ratios with strong selling and hit the 1.40520 vicinity, but the quick and steep decline was abruptly reversed as U.S Federal Reserve monetary policy ignited more fear of rate hikes to come.
As the elevator ride upwards increased and financial houses responded to the Fed’s mantra that inflation remain strong and the U.S central bank must remain vigilant, the USD/SGD came within sight of the 1.41900 level. The USD/SGD had not seen this level essentially since Tuesday of last week, when the Forex pair was in the midst of falling from a high of nearly 1.42525 achieved earlier that day.
Optimistic Behavioral Sentiment has been dealt a Strong Punch Again
The USD/SGD was trading near a high of almost 1.44900 on the 28th of September. Since touching that high which had been last seen in March of 2020, the currency pair had managed to retreat with incremental selling. Support ratios were not swept aside quickly, but technical selling had been rather strong in October. Behavioral sentiment believed a potential shift of policy might be undertaken by the U.S Federal Reserve, that has not occurred and instead Fed rhetoric has remained aggressive.
- The U.S central bank raised their key interest rate by another 0.75% yesterday, which was expected. The Fed reiterated that it intends on raising rates more, possibly with ‘only’ 0.50% increases – but without a pause.
- Financial houses which were wagering on mid-term bearish shifts of value within the USD/SGD may now have to reevaluate their outlooks and potentially remain bullish with the currency pair.
The USD/SGD is still within its Bullish Trend and may Challenge Resistance Above
Speculators who are tempted to pursue the USD/SGD may want to look for higher moves near term. Conditions are likely to be volatile and traders should not be surprised by the potential for choppy results, but resistance levels for the USD/SGD may prove attractive in the short term as targets for buying wagers.
If the USD/SGD can flirt with last night’s highs around the 1.41800 to 1.41900 ratios, there is reason to suspect a higher move may also emerge. Traders should use strict risk management as financial houses potentially reset their cash positions the next two days as they search for equilibrium in the USD/SGD.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.41800
Current Support: 1.41610
High Target: 1.42190
Low Target: 1.41020
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