Traders are being reminded by the USD/SGD that trends can be powerful tools when speculating. After being able to demonstrate one of the better bearish moves from last September of last year until late January this year, the USD/SGD has turned into a volatile mess. However, since the middle of July, mirroring many other major currency pairs teamed against the USD, the USD/SGD has enjoyed a rather sustained bullish climb.
In early trading this morning the USD/SGD hit the 1.37500 level which is a high that had not been seen since late November of 2022. Technical traders who continue to look for a sudden reversal lower that builds power in the USD/SGD have likely continued to struggle. The USD/SGD continues to correlate to the broad Forex market as the USD exhibits bursts of strength.
SGD/USD 1.37000 Level Penetrated and Maintained for Time Being
After breaking through the 1.37000 level yesterday, the USD/SGD has shown the ability to not only maintain its value above but also create momentum upwards and touch another high this morning. The current price of around 1.37365 may be less than the upper values seen earlier today, but they are still within the highest realms of the USD/SGD having surpassed values seen on the 27th of September.
Global markets continue to exhibit nervousness because it is widely believed the U.S. Federal Reserve will increase its Federal Funds Rate in November. Yesterday’s U.S. ISM Manufacturing reading came in slightly above expectations. Another hint regarding the behavioral sentiment that exists is the notion that gold has declined hard the past week, which often correlates to a stronger USD.
- The U.S. will release its Non-Farm Employment Change numbers this coming Friday, along with the Average Hourly Earnings. These two reports will cause volatility at the end of this week.
- The short and near-term for the USD/SGD will likely remain choppy. Yes, reversals have been seen lower, but rather distinct climbs have then been ignited as nervousness remains strong in Forex.
Speculative Quick-Hitting Positions in the USD/SGD
The USD/SGD did break below 1.36100 briefly last Friday, which shows the rapid pace the USD/SGD can frequently exhibit for speculators in all directions. Risk management remains essential in the currency pair as it not only deals with worries about the U.S. Federal Reserve but China's economic conditions which plenty of Singapore financial institutions have been exposed to and is causing concerns.
The upward movement in the USD/SGD may look overbought, but the short and near-term may continue to test higher levels. Traders should certainly keep in mind that Friday will produce volatility because of the U.S. jobs data.
Singapore Dollar Short-Term Outlook:
Current Resistance: 1.37455
Current Support: 1.37225
High Target: 1.37775
Low Target: 1.36865
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