Traders who have been pursuing upside momentum have likely run into a buzzsaw the past two days of trading as a strong reversal lower has been produced within the USD/SGD. As of this writing, the Forex pair is near the 1.35410 level and it has seen additional selling this morning as the USD/SGD hovers over what could prove to be important support near the 1.35350 mark.
The USD/SGD has joined many other major Forex pairs as it has produced choppy conditions. This can be a good and bad thing for traders. Speculators who have chosen their direction wisely (or luckily) have likely found profitable positions, but those who have stubbornly maintained buying positions as they seek reversals higher have probably not been satisfied. The other question that needs to be examined is the amount of leverage being used as the USD/SGD is traded.
Because of the extremely choppy short-term reversals as support and resistance levels are burst, traders should reduce the amount of leverage they are using under current conditions. While this creates ‘less bang for the buck’ while a speculative wager is being made, it also helps reduce the amount of risk within a trader’s account when storms surge within the USD/SGD. And in the past week there have been plenty of sudden storms which have hit the Forex pair.
Typically, the USD/SGD is a rather calm Forex pair to pursue, but the results the past week have seen fast changes in value. As the Forex pair challenges support levels now, traders should pay attention to the 1.35400 level; if this ratio proves vulnerable it could cause further selling momentum to build. Technically, this level could be a strong catalyst short term as perceptions regarding the trend will have to be deciphered and wagers are made.
The USD/SGD is near an interesting price level; if the 1.35400 value fails to hold, suddenly the Forex pair would be challenging early August values where a surge of trading was demonstrated on the 6th of August. Traders who decide to sell and pursue the short-term trend of the USD/SGD should use risk management wisely, and the same goes for speculators who decide that reversals higher will be attained.
Singapore Dollar Short-Term Outlook
Current Resistance: 1.35540
Current Support: 1.35310
High Target: 1.35760
Low Target: 1.35070
