The USD/SGD has seen a burst of selling emerge the past day and short term momentum is making current support levels appear vulnerable. Speculative risk appetite has seeped into the Asian equity market this morning and early afternoon and if the sentiment continues to build today and tomorrow, this could prove a capable opportunity to short the USD/SGD.
Important short term support has been tested and broken. The 1.39000 juncture is within sight for traders. The support level was tested already in earlier trading today but did experience a reversal upwards. Technical trading often makes many fundamental analysts cast skepticism at techniques used, but even fundamental traders will acknowledge key market movements with some of the biggest reactions that occur when ‘even’ numbers are hit. The 1.39000 level is significant and if it finds enough momentum from a short term bearish trend, the next target for sellers could be the 1.38800 mark.
The month of June did see plenty of trading for the USD/SGN between levels of 1.38500 and 1.39100. If risk appetite is returning in force to the broad markets and concerns about coronavirus are pushed to the side for a few more days, traders may have an opportunity to take advantage of over-exuberance in the forex markets with trends. The Singapore Dollar has many fans internationally. The ability of its government to remain in power and transparent while also proving capable economically gives credence to the belief the SGD can be trusted.
Upside movements exist, the USD/SGD could easily experience a buying trend. This morning’s trading actually produced a reversal after the forex pair tested support. However, speculators should ask themselves which movement carries the best opportunity for the biggest move. Also, traders need to contemplate if resistance or support looks stronger. Currently, resistance at the 1.39600 level appears to be more solid than the support levels below. This means that if a person wants to enter a selling order with solid entry values (a limit order), this may prove the time to pursue a short position of the USD/SGD.
Trading in Asia appears to be optimistic today and if the United States creates another day of positive momentum in the equity indices, speculators may have plenty of reason to suspect the forex markets will produce a weaker USD against many major currencies in forex before going into the weekend.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.39650
Current Support: 1.39000
High Target: 1.39750
Low Target: 1.38750
