The USD/SGD has experienced a wave of buying in early trading this morning, but the forex pair remains within a known range.
The USD/SGD has seen buying emerge early this morning as the forex markets likely reacted to economic data published in Singapore which shows its economic growth took a huge hit statistically. Coronavirus and its economic impact are certainly going to affect many nations. Singapore will face challenges due to its position within international commerce via its roles in shipping capacity, commodity trading, banking, and technology. However, while the USD/SGD has challenged short term resistance levels this morning, the Singapore Dollar remains within an established range.
Resistance for the USD/SGD still appears rather reasonable near the 1.39650 juncture and it should be noted that support levels below were actually tested too via short term trading. Traders may ask themselves how the USD/SGD remains within a fairly consolidated range even when Singapore’s GDP statistics show an astonishing negative drop in economic growth after the publication of data. The short answer is because many analysts had already projected the ghastly Gross Domestic Product numbers and the Singapore Dollar does remain an important international currency that is in demand.
Speculators who are able to consider going against negative sentiment may decide the USD/SGD has been bought a bit too much in early trading. The mark of 1.39650 has proven capable before and traders may be willing to enter limit orders to sell near this mark to see if the forex pair can produce a sudden reversal downwards.
Solid risk management will need to certainly be used under present market conditions, global equity indices do look as if they may be challenged today and risk appetite may not be strong the next couple of days. Traders should watch the Singapore Dollar carefully and decide if the USD/SGD will actually prove to have more possibility for a bearish trend than a bullish trend to be generated. Resistance levels technically near the 1.39750 and 1.39900 have proven strong the past month and if speculators believe the market may have a bit more buying which has to play out for the USD/SGD, they may want to put selling positions near these loftier resistance junctures.
Yes, Singapore reported bad economic data today, but its nation remains an important part of the economic world and the Singapore Dollar has proven capable before. The USD/SGD may still attract sellers in the short term.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.39650
Current Support: 1.39000
High Target: 1.39750
Low Target: 1.38750