It is no secret Forex, including the USD/SGD, has not produced an easy trading landscape for speculators in the past month and a half. The USD/SGD has been a focal point for Forex observers who like to interpret markets via behavioral sentiment.
Singapore is a major financial hub where East meets West and its transactions via USD/SGD are influenced by fundamental changes regarding the demand for its services in banking, shipping, and commodities. The USD/SGD has moved towards short-term support levels in early trading this morning but in a rather choppy manner.
As of this writing the USD/SGD is near the 1.35400 ratio, support near the 1.35350 level is likely being targeted for the moment, with an eye on lower ratios around 1.35300. However, short-term traders will likely find it difficult to stay in a position that seeks these lower depths if they are using too much leverage, because the USD/SGD has not only touched key support early this morning but has demonstrated some reversals higher.
Sentiment Remains Fragile in the USD/SGD
Nervous conditions in the global markets have affected the USD/SGD. Talk about prolonged higher interest rates from the U.S have created volatility in U.S Treasuries the past few weeks, and concerns about China’s economy have added to concerns for financial institutions dealing with the USD/SGD.
The choppy trading the currency pair has displayed the past week actually created some consolidated price movement for speculators however. A lower move has started to be displayed since early Friday of last week; this as reversals higher have seemingly run into resistance and perhaps created the sensation of stronger selling in the USD/SGD.
- A high of around 1.35875 was produced on Friday and then the USD/SGD began to ebb lower.
- The U.S. will release home price and consumer sentiment data today and this could have a momentary effect on the USD/SGD depending on the results.
- Weaker U.S. data may help the USD/SGD continue to test lower support levels.
Beware of Choppy USD/SGD Conditions Remaining until Financial Institutions have Better Clarity
The ability of the USD/SGD to move lower early this morning will likely run into reversals higher which will also test short-term resistance. Financial institutions may believe the USD/SGD has been overbought the past few weeks and continue to attempt selling positions that seek lower ground, but cautiously.
Until there is conclusive evidence nervous sentiment is calming, it is unlikely price velocity will create strong momentum lower; meaning a test of support levels may not break below ratios and keep sustained. Traders should take profit orders seeking momentary moves in the USD/SGD which try to take advantage of consolidated price action which is likely to be seen in the near term.
Singapore Dollar Short-Term Outlook:
Current Resistance: 1.35480
Current Support: 1.3550
High Target: 1.35575
Low Target: 1.35275
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