After testing lows early yesterday the USD/SGD has climbed slightly higher, this as financial institutions seemingly take on more risk appetite but wait for more impetus.
- The USD/SGD is trading near the 1.34770 mark as of this writing which continues to display some bearish sentiment over the past few weeks.
- However, after touching a low around the 1.34410 ratio yesterday, the currency pair has climbed higher.
- While financial institutions have shifted towards a weaker U.S Federal Reserve outlook, the trend of the USD/SGD is not a one way street downwards.
This morning’s early reversals higher show that a range is still being fought over and the values of the USD/SGD are now entrenched technically in the middle of its three month price range. It is clear that plenty of speculative technical support remains around the 1.34500 to 1.34400 levels which may cause gyrations when challenged over the near-term.
Lack of Big U.S Data Early this Week for the USD/SGD
The U.S will not post much in the way of earth shattering economic data early this week. On Thursday there will be Purchasing Managers Index numbers via the Manufacturing and Services sectors, but it is likely the USD/SGD will continue to be influenced by existing sentiment which has taken on a more optimistic tone regarding inflation. Last week’s CPI numbers from the U.S caused a real selloff in the USD/SGD and the low around 1.34200 tested values last seen on the 21st of March.
The question for traders of the USD/SGD will be focused on existing sentiment. The notion that the USD/SGD has been banging up against support the past handful of days is interesting, but perhaps the more solid clue for technical traders is resistance. If the 1.34800 to 1.34900 levels prove durable this could provide traders with an opportunity to look for some downturns. Unless there is a surprising development today and tomorrow, risk of upwards momentum suddenly becoming strong looks diminished.
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Aiming for Realistic Targets in the USD/SGD
While risk appetite has increased in the global markets and the USD has become weaker, yesterday’s low and reversal higher serves as a reminder that ranges remain dominant. Becoming overly ambitious regarding trends is dangerous for short-term day traders. The lows seen last Wednesday may prove to be a low water mark for the USD/SGD until there is more impetus delivered for Forex.
- And for the USD to grow weaker and extend its decline, inflation reports will have to show signs of more erosion.
- On Friday the U.S will see the University of Michigan Inflation Expectations report; this could provide some power for traders.
- But if the number is higher than expected, the USD/SGD could suddenly see some buying power emerge.
- Until later this week the USD/SGD is likely to remain within its known range.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.34780
Current Support: 1.34675
High Target: 1.34920
Low Target: 1.34510
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