The USD/SGD battled through a short term bullish trend which was experienced from the 5th of August until the 12th of August, yet bearish momentum has been reestablished the past three trading sessions. In early trading this morning, the USD/SGD is near critical support levels which have proven a catalyst for buying reversals upwards in August. However, speculators should be wary of pursuing a sudden bullish thrust unless they have specific upward targets in mind and are using limit orders.
The movement in the USD/SGD will certainly not be a one-way avenue downwards; speculators with strong stomachs can certainly look for short term bullish reversals within the current price vicinity for the USD/SGD. The price range of 1.36970 to 1.37050 could be a band which traders look to engage in buying of the forex pair and seek values which could certainly drift up to the 1.37200 level with relative ease.
However, traders should also please take note the USD/SGD has been within the grasp of a strong bearish trend since late March and its downward momentum is not a sudden development. In fact, the Singapore Dollar is now testing values it has not traversed since early February. Speculators should also be aware that the support level of 1.36700 if tested will be a critical inflection point for the USD/SGD.
Can the Singapore Dollar actually test the 1.36700 level near term? It is a difficult question to answer, but if support levels are broken below the 1.36860 mark and the USD/SGD can sustain pressure on these support levels an important test of the forex pair’s value will certainly emerge.
So while short term speculators may be more comfortable questioning the mid-term direction of the USD/SGD and may want to look for short term reversals upwards, global risk appetite and the strength of the Singapore Dollar should be looked at as a dynamic trend which may continue and produce more bearish momentum.
Stop-loss limit orders should be used with the USD/SGD. However, trading within the forex pair is relatively calm compared to many other emerging market currency pairs and speculators should consider continuing to sell the USD/SGD and look for further downside action.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.37200
Current Support: 1.36860
High Target: 1.37400
Low Target: 1.36750
