- The USD/SGD has sold off in early trading this morning and the currency pair is now traversing around the 1.33925 ratio which it also challenged yesterday.
- The lows on Monday penetrated the 1.33900 level and touched a depth close to the 1.33885 mark, but could not sustain the lower depths.
- Having hit a high of near 1.34700 last Wednesday, the USD/SGD has certainly come off its high but still lingers within the upper elements of one month range.
Day traders have had to deal with a rather incremental climb upwards for a handful of weeks; this after the USD/SGD hit a low around 1.31565 on the 28th of December. The USD/SGD has correlated with the broad Forex market as it has been influenced by post-holiday doubts about the strong selloff which occurred following the 13th of December’s Federal Reserve FOMC Statement. USD strength has been displayed in Forex for nearly four weeks.
Perhaps a USD/SGD Shift of Sentiment Underway Once Again
Short-term traders have dealt with gains in the USD/SGD since late December, and are now likely to starting to believe the current reversal lower may be ready to continue testing known depths. The broad Forex market has shown signs the past couple of days of USD weakness among many major currency pairs. Will it continue?
Financial institutions which have been cautious following the holiday season (check out our Holiday Season Trading Schedule article) may be once again leaning towards their weaker USD outlooks mid-term. The USD/SGD has moved lower as U.S Treasury yields declined yesterday and risk appetite in U.S equity indices continues to achieve record values.
USD/SGD Support near 1.33900 Important in the Short-Term
The 1.34000 resistance level in the USD/SGD should be watched as a barometer in the short-term. If values can be sustained under this mark and the price of the currency pair lingers near yesterday’s lows it may be a solid sign that bearish sentiment may be anticipating further selling.
The 1.33900 level should be watched, a break below this support level may increase speculative selling activity which believes the USD/SGD has been overbought in the past few weeks. However the near-term is likely to remain choppy because financial institutions are aware that important U.S data will be released later this week.
- Growth numbers via the GDP data will be released on Thursday in the U.S, and this will be followed on Friday by inflation statistics which the Federal Reserve watches closely.
- Short-term traders may want to aim for lower values in the USD/SGD, but they should not get overly ambitious.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.33995
Current Support: 1.33905
High Target: 1.34210
Low Target: 1.33790
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