- A narrow price range has developed in the USD/SGD the past handful of days.
- Yes, there have been the typical fluctuations and reversals which are a constant in Forex, but trading conditions have seemed to have priced in equilibrium.
- Financial institutions which clearly reacted to what were perceived as an oversold USD/SGD going into January have returned the currency pair to values within sight of the Federal Reserve’s monetary policy statement which was conducted on the 13th of December.
The USD/SGD is still trading below the values that were seen from the 11th through the 13th of December, but the currency pair is within sight of this decisive time. The Federal Reserve will present its next FOMC Statement tomorrow. Financial institutions know the Fed will be speaking and they will be ready to react.
USD/SGD Day Traders Should Practice Caution and Stay Alert
Two Wednesday’s ago, on the 17th of January, the USD/SGD hit a high of nearly 1.34700, the current price of the currency pair is near the 1.33995 mark. Last Wednesday the USD/SGD was trading at a low around the 1.33625 mark. Since last week the USD/SGD has traded within a fairly narrow range in which speculators have had opportunities to take advantage of near-term resistance and support.
Yesterday’s high of nearly 1.34285 was challenged twice, once early in the trading session and later on, but both times a reversal lower took place. Financial institutions appear to be in a waiting mode for tomorrow’s Fed policy rhetoric before they lean too heavily on perceived outlook. However traders need to understand short-term conditions and mid-term outlooks likely differ in many trading institutions. Speculators who want quick hitting results may continue to see a rather tight market short-term, but sometime tomorrow the range of the USD/SGD is likely to widen and volatility will develop.
Short-Term Movement vs. Mid-Term Outlooks for USD/SGD
Last week when reporting on the USD/SGD it was written here that the 1.34000 level was important and this has not changed. The question is what will happen tomorrow after the Fed’s FOMC Statement. No interest rate changes will be made tomorrow by the Fed, but large players will certainly react according to the outlook which the U.S central bank expresses. An interest rate cut was hoped for in March of this year, but it now appears that a cut may occur later in the spring: potentially in May.
- Traders should be careful and use conservative risk taking tactics today in the USD/SGD.
- A range between 1.33875 and 1.34100 should be given attention in the short-term. Tomorrow this is likely to change.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.34035
Current Support: 1.33965
High Target: 1.34110
Low Target: 1.33870
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