After trading at an early morning low of nearly 1.31145 the USD/SGD has climbed slightly as the currency pair continues to traverse a rather known near-term technical range.
- The USD/SGD pair is near the 1.35255 mark as of this writing, this after achieving a morning low which traded below yesterday’s support ratio.
- The USD/SGD however remains rather locked into a trading range that has dominated since late on the 13th of June.
- The 1.35000 to 1.35500 range has proven rather durable except for a few outliers. Via a one month glance at a technical chart the USD/SGD is currently trading ground that it tested in late May.
While the U.S will see a Consumer Confidence reading later today, this number will likely only serve as a momentary impetus for the USD/SGD. The big economic number for the currency pair and all of Forex will come on Thursday when the U.S Gross Domestic Product data is released. The U.S growth numbers are certain to cause a storm if the numbers come in weaker than anticipated, and this is where consideration of potential behavioral sentiment should be factored by day traders.
Tight Range Offers Clues about Behavioral Sentiment
While the USD/SGD trades within its rather tight range, this continues to show that some financial institutions may be still carrying a weaker USD mid-term centric outlook. Yes, the USD/SGD like all other Forex pairs has been notoriously choppy the past six months. Trends have been hard to take advantage of, but this also opens the door to considerations via longer term charts like three and six month perspectives that cautious trading seems to indicate that financial institutions do not think the USD can get much stronger.
Reversals upwards will certainly still happen, but the question that needs to be answered is where the greatest amount of movement is likely to be generated over the mid-term, and that may be to the downside. True, the USD/SGD is trading at values it traversed on the 13th of February today. And yes it is very difficult to time short-term moves, particularly when financial institutions clearly are still waiting on bigger impetus.
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Short-Term Wagers and Economic Considerations
There are no guarantees, but if financial institutions believe the U.S growth numbers on Thursday may come in weaker than anticipated, this may be creating some headwinds for the USD/SGD momentarily. Meaning selling the currency pair when short and near-term resistance levels technically are challenged may be an attractive quick hitting wager tool.
- However, this is dangerous and risk management is very important.
- Also, if the GDP numbers on Thursday come in close to expectations, this could actually spark some wicked reversals in the USD/SGD higher, particularly if financial institutions are not satisfied with the outcome of the growth data and believe it will cause the Federal Reserve to remain in neutral for longer than expected.
- The range game is in full play currently for technical traders and caution is advised.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.35320
Current Support: 1.35180
High Target: 1.35440
Low Target: 1.35050
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