The USD/SGD has delivered speculators a trading range to take advantage of support and resistance levels since last Friday. The sideways price action however that has been demonstrated in the currency pair has taken place within the highest realms of its one-month range. The sudden delivery of rather consolidated price action in the past few days is an indication that financial institutions are nervous about risk events that will start to take unfold today and tomorrow.
As of this writing the USD/SGD is near the 1.34565 ratio, this as the price range of the USD/SGD has largely traded between 1.34450 and 1.34800 the past few days with occasional outliers. Today in the U.S., Janet Yellen the Treasury chief will speak at an event held by the Wall Street Journal for top businesspeople and she will certainly be asked about debt ceiling concerns. Also important on schedule today is the U.S Federal Reserves’ FOMC Meeting Minutes.
Conservative Movement in the USD/SGD as Traders Await U.S Risk Event Outcomes
Financial houses and traders are nervous about U.S. government policy regarding debt issues, and U.S. central bank outlook regarding the potential for a June interest rate hike. This has caused a rather strong amount of caution in global marketplaces as equity indices and Forex has become rather muted because of nervousness. The last time the USD/SGD traded above the 1.35000 level was in the middle of March and from there it traded at a low of nearly 1.32025 on the 14th of April.
- On the 10th of May, the USD/SGD was trading near the 1.32250 level, after reaching a price of 1.33920 on the 25th of April.
- The fluctuations in price range show momentum is rather choppy as traders react and try to gauge the U.S Federal Reserve interest rate policy.
- Yesterday manufacturing numbers from the U.S were negative. On Thursday the U.S. will present Prelim GDP numbers and inflation statistics.
USD/SGD Higher Price Range Holding as Nervousness Remains Abundant
Speculators who became used to the long-term downward march of the USD/SGD have likely had a difficult month of trading if they have been pursuing selling positions technically. Behavioral sentiment in the past couple of weeks has caused investment houses to become cautious, because the outlook of the U.S. Federal Reserve remains unclear as they deal with inflation.
Also added to the complex trading is the notion that some risk-averse buying of the USD has taken place, because of the U.S debt ceiling debate which could turn into a full-blown crisis if it is not handled correctly. Traders need to be careful today and conservative speculators may want to watch from the sidelines as risk events unfold over the next ten hours. Consolidation displayed in the past few days may not hold in the wake of today’s news.
Singapore Dollar Short-Term Outlook:
Current Resistance: 1.34740
Current Support: 1.34550
High Target: 1.34980
Low Target: 1.34210
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