- The USD/SGD has produced a rather tranquil range the past couple of days, this as many financial institutions were closed and celebrated the Lunar New Year in Singapore.
- Upon the return of traders this morning the USD/SGD has remained calm and is trading near the 1.34550 ratio.
- However, as the USD/SGD appears to be within a price range which financial houses are comfortable, the U.S will release its Consumer Price Index readings later today and inject volatility.
Early last week’s highs in the USD/SGD have not been revisited. The downwards momentum in the currency pair which began late on Thursday of last week after testing highs within sight of 1.34800, and then achieved a low of nearly 1.34370 yesterday are interesting. The results must be looked at skeptically perhaps because trading volumes have been lighter than normal due to the Lunar holiday being celebrated. Yet, the USD was weaker throughout Forex on Friday, this as global financial institutions probably viewed it as having been overbought earlier in the week.
Tranquil USD/SGD Trading Could Evaporate Late Today
Financial institutions are still waiting for a better outlook regarding timetables for the Federal Reserve to start cutting interest rates. The ability of the USD/SGD to reverse higher since the start of January is a healthy correlation to the broad Forex market. Today’s inflation numbers from the U.S from the Consumer Price Index reports will certainly affect the USD/SGD.
Technical traders may continue to have the advantage in the short-term as they battle known support and resistance levels. However, if the CPI reading this afternoon from the U.S demonstrates a surprise, then volatility in the USD/SGD is certain to increase and the price range of the currency pair will widen. Traders should have risk management active if they are pursuing the USD/SGD later today.
USD/SGD 1.34000 to 1.35000 Levels are Crucial
Traders are likely looking at resistance levels and support levels between the 1.34300 to 1.34700 levels as rather durable for now, but the gulf between speculative prices is likely to grow later today and the 1.34000 to 1.35000 could become easy psychological targets if there are surprises in U.S data.
- If the CPI comes in stronger than expected today, this could create bullish sentiment in the USD/SGD.
- If the inflation reports come in weaker than anticipated the USD/SGD is likely to turn bearish.
- Traders should expect price velocity to become fast and need to pay attention to the U.S CPI reports later today.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.34610
Current Support: 1.34490
High Target: 1.34920
Low Target: 1.33960
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