Singapore banks will likely get plenty of attention as summer emerges. As tensions mount between China and the U.S regarding foreign relations and their international trading statures, Singapore is quietly being looked at as a potential magnate for expansion regarding its financial institutions internationally. Simply put if Hong Kong continues to come under pressure there will be international companies and institutions that may seek the safer and nearby shores of Singapore.
Seemingly, speculating on strength to emerge for the Singapore Dollar short term because you believe a long term financial change ‘may’ be taking place would be foolhardy because puzzles are often complex. The Singapore Dollar versus the US Dollar has traded towards a weaker range in early trading this morning. The USD/SGD has been testing waters between 1.3930 and 1.3950. However, if you use technical charts and merge them with fundamentals outlooks a viewpoint that the Singapore Dollar will get stronger may prove a wise decision.
Traders with a taste for adventure and an interest in the Singapore Dollar may want to brush aside fundamentals and focus on trend, particularly if aiming for positions in which they are able to be nimble. Meaning a trader needs to focus on an inflection point and for short term plays in the USD/SGD they should look at the 1.3930 as a touchstone today in my opinion.
The Singapore Dollar has room to weaken further and potentially test important resistance around the 1.4000 mark. However, gunning for a resistance level this high short term would take solid risk management. On the other hand, if the USD/SGD should fall below value of 1.3930 it could mean a test towards the 1.3910 levels and further strengthening.
The Singapore Dollar is still near its strongest values versus the US Dollar in trading over the last week. The level of 1.3920 has consistently held the past week, but will it continue to do so? So the question is if the Singapore Dollar will be able to continue its stronger trend and the answer is probably yes. However, if you are looking for short term day trades, aiming for strength when technical indicators suggest another test of weakness could prove frustrating.
So what do you do? Interestingly enough, I would strongly consider going short against the US Dollar and seek stronger values from the Singapore Dollar. Meaning I believe the trend will test support around 1.3920 and break lower to values not seen since early March.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.3950
Current Support: 1.3930
High Target: 1.4000
Low Target: 1.3880
