The USD/SGD has accomplished a lower value range the past day and a half, interestingly this has occurred before the U.S election results tomorrow and the Federal Reserve on Thursday.
Since climbing to highs last Friday after a volatile day of trading and touching values last seen in early August, the USD/SGD has sold off. The ability yesterday to gap lower and fall below the 1.32000 level was a solid bearish signal and the sustained lower trading this morning is equally impressive. However, day traders and financial institutions are fully aware the U.S election is taking place today and this will throw a large firecracker into global Forex later today and certainly tomorrow.
The USD/SGD at the time of this writing is near the 1.31910 ratio, but traders need to check on the value of the currency pair as they read this article to judge what has happened during the day. Volatility is a certainty in the coming hours and by later today and tomorrow day traders may do best if they simply stay out of the marketplace, particularly if they are easily affected by their emotions. The appearance of lower price movement in the USD/SGD is attractive.
USD/SGD Lower Move as a Potential Sign of Things to Come
The USD/SGD, like most other currency pairs has seen a large amount of risk adverse trading via USD centric strength since the end of September. This buying momentum in the USD/SGD saw a nervous climax on Friday of last week, this as the U.S Non-Farm Employment Change numbers came in worse than expected. But wait a minute, why would the USD/SGD go up to mid-term highs as U.S economic news was worse? Likely because financial institutions were displaying they are nervous too.
Yesterday’s selling which produced a solid technical gap lower is a sign some folks believed the USD/SGD reached too high on Friday and was overbought. Yes, trading in the currency pair is certain to be fast and dangerous today and tomorrow, technical considerations should be looked upon skeptically because reversals will flourish. However, what develops after the U.S election results are seen is when the USD/SGD will become quite worthwhile to monitor. Upon clarity, if the USD/SGD starts to sell off and stays below the 1.32000 mark, this may be a solid bearish signal. But between then and now many dangers lurk and traders need to be extremely cautious.
U.S Election and the Federal Reserve
Not only will U.S election results be seen hopefully by this time tomorrow, but the U.S Fed is going to conduct its FOMC meeting and release their interest rate statement on Thursday. After U.S economic data last week came in below expectations, there is a reason to suspect the Fed will cut by O.25 and perhaps remains cautiously dovish.
If the Fed says they still are considering more interest rate cuts over the next few months, this could fuel USD centric weakness.
USD/SGD currency pair financial institutions are sophisticated, they will react over the next couple of days with volatility, but because of the U.S election and the coming results tomorrow risk management will be the key for anyone looking for wagering opportunities.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.32050
Current Support: 1.31850
High Target: 1.32260
Low Target: 1.31575
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