The USD/SGD has proven a solid barometer of global risk sentiment once again. The Singapore Dollar struggled early last week as resistance levels began to be broken higher as the USD was bought while risk-averse trading dominated. After reaching high water levels on Wednesday, a shift however began to develop and selling reasserted power. In fact, while testing the important 1.36600 support level it crumbled briefly and a spike downwards towards the 1.36320 mark was demonstrated. This promptly set off an additional wave of buying, but this time the 1.37000 juncture held as resistance after being touched.
As trading neared the weekend the USD/SGD began to see some selling and as of this morning, the 1.36600 value is an obvious inflection point. Traders should watch the Singapore Dollar and examine its ability to sustain price action below the 1.36700 level. If a trend can be established which demonstrates the 1.367000 mark can hold as resistance this could trigger additional selling by bearish speculators who perceive further downward momentum may continue.
September has proven to be a difficult month in global equity indices as profit-taking and nervousness has been displayed, but this followed a clear buying surge in August which took many indices into record territories or at a minimum proved buyers were prevalent. The USD/SGD has seen a wave of selling since late March and the forex pair is now testing values not truly tested since early February. While this doesn’t mean fears about the future implications of coronavirus do not exist, it does however show international commerce and finance have resumed a solid amount of activity.
If the USD/SGD can sustain its current price range, traders who are bearish may begin to believe lower targets within the 1.36500 to 1.36000 trajectories may be legitimate. Throwing additional fire on the power for an argument regarding further potential selling of the USD/SGD is the fact that in January of 2020 the Singapore Dollar was trading in the vicinity of 1.34500 to 1.36600.
No, the global economic landscape isn’t risk-free. However, speculators may continue to choose to seek selling positions of the USD/SGD with the belief further bearish behavior can develop. Selling the USD/SGD near 1.36700 juncture and slightly higher, while using limit orders and trying to find downside momentum cannot be faulted.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.36800
Current Support: 1.36530
High Target: 1.36940
Low Target: 1.36400
