USD/SGD: New Lows as Long-Term Technical Values Contemplated

As of this writing the USD/SGD is trading slightly below the 1.30500 level. The USD/SGD is trading near values that it last touched in early 2018. Technical traders trying to find price levels for lower trajectories are being challenged, as they contemplate the strong bearish trend the USD/SGD has provided since the last week in September 2022.

Yes, on the surface the USD/SGD traded lower after the U.S Federal Reserve’s monetary policy pronouncements yesterday. The U.S central bank raised its main interest rate by 0.25%, and while they said another rate rise again next month is likely, the Fed admitted that inflationary pressures in the U.S. are lessening.

The Fed said it will remain vigilant regarding inflation and therefore wants to raise interest rates again next month to keep the pressure on the potential of higher inflation. The USD/SGD was trading near the 1.31350 ratios yesterday, before diving lower significantly and falling to its lowest values in five years.

There are other Factors for the Bearish Trend in the USD/SGD

While the U.S. Federal Reserve has certainly been an impetus for the bearish decline in the USD/SGD, traders may want to look for additional clues too fundamentally. The ability of the USD/SGD to trade at five-year lows should be considered and it is likely that there are other reasons the currency pair is making long-term support ratios look consistently vulnerable.

• It should be remembered that China has reinvigorated its business community after a long period of being stalled due to coronavirus implications and mandates.
• It is likely that Singapore banks are now fully engaged in larger business transactions because of purchases of commodities via Singapore trading companies because of China’s increased activities.
• Singapore financial institutions have likely increased cash transactions as banks are getting busier while dealing with increased demand from China for international payments.

Support near 1.30000 may Look Far Away in the USD/SGD for Traders

Support ratios have certainly continued to be tested in the USD/SGD and made to look vulnerable.  The USD/SGD isn’t the largest currency pair in the world by any measure, but speculators who have been pursuing the bearish momentum likely have found a solid ‘friend’ regarding selling wagers.

However, traders should remain cautious and not become overly ambitious regarding their bets. While the USD/SGD continues to show it has the power to deliver lower price action, reversals higher certainly occur. Tomorrow’s jobs numbers from the U.S will be another factor in USD/SGD trading.

Singapore Dollar Short-Term Outlook:

Current Resistance: 1.30640

Current Support: 1.30300

High Target: 1.30990

Low Target: 1.29990