The USD/SGD created a surge of selling the past couple of days and speculators now have a different short term technical trading landscape which they have to carefully consider. While the trend is often a nice avenue to follow, questions emerge when there are few technical road signs and the map appears unexplored.
After a downward movement tested support a couple of days ago near the 1.38800 level, a prompt reversal higher took place and tested resistance below marks of 1.39160. However, the bull reversal was not able to prove it was anything but a temporary reaction and that is when a real selling storm ensued. Support levels proved vulnerable and the last day of trading has put a support level of 1.38200 into view after the USD/SGD’s bearish momentum took no prisoners.
So where do speculators who want to consider selling the USD/SGD look for evidence? A one month chart offers little correlation for further downside action, traders need to stretch the charts out a bit more to the first ten days of June to see the last time the Singapore Dollar tested these values. On the 10th of June, the USD/SGD traded near the 1.38200 low watermark and steadily reversed higher.
From the 10th of June until today, the USD/SGD has traded within a fairly consistent range of 1.38400 to 1.39700. However, since the 10th of July resistance has proven very strong around the 1.39500 juncture and has incrementally put in lower marks. The surge in the selling of the USD/SGD puts its short term resistance near the 1.38600 level as of this morning.
The Singapore Dollar remains perched near important support levels. Speculators may actually be inclined to look for slight reversals higher via experienced notions forex trading is seldom a one-way avenue. The question that needs to be asked is if risk appetite and a need for Singapore Dollars will continue to feed a bearish trend? Traders should be nimble today and tomorrow and use caution if they seek short term opportunities.
Speculators may be willing to test both sides of the USD/SGD via limit orders. While support may prove vulnerable, traders cannot be faulted however for believing a test of short term resistance may develop again, meaning buying the USD/SGD near current market values between 1.38300 and 1.38400 and looking for upside momentum with quick trades may prove opportunistic.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.38600
Current Support: 1.38200
High Target: 1.38800
Low Target: 1.38000
