USD/SGD: Displaying Countermove Fireworks

Robert Petrucci

The past two days has seen a strong countermove develop within the USD/SGD after the Singapore Dollar tested critical support on the 21st of September.

Speculators should treat the USD/SGD with respect near term. After touching support levels not sincerely tested since late January of this year, the Singapore Dollar has seen a bullish trend emerge short term which has brought the USD/SGD close to the 1.36750 level as of this morning. Caution needs to be practiced by traders and this means risk management using limit orders will be practical.

The USD/SGD has produced a solid bearish trend in September, adding onto selling momentum which has been steady since late March. However, it is clear trading programs initiated buying of the USD/SGD when important support levels were hit early this week. The strength of the move upwards has consistently broken resistance and the question is if the 1.368000 level will prove vulnerable and a potential target of 1.37000 is the next target.

Speculators however may see this short term bullish run higher as an opportunity to display their perception that the trend may only be a temporary cycle and that another selling burst will emerge.  Early trading this morning has seen incrementally higher values for the USD/SGD as it continues to press up against resistance and brush it aside adding to the need for a cautious approach.

Risk appetite in the global markets has certainly been fragile early this week, yesterday’s gains on US equity indices were not mesmerizing and early calls from the American future markets indicate a mixed opening.  This sets the table for further choppiness in the USD/SGD today and perhaps tomorrow until traders feel confident about direction regarding sentiment.

Mid-term the USD/SGD has produced a solid bearish trend and the fact that the forex pair was trading near the 1.35400 level only two days ago reflects where optimistic behavior can deliver the Singapore Dollar again. While the markets remain cautious, however, traders should be prepared to use limit orders to take profits and stop losses to make sure they are not mortally wounded by sudden surges which cause surprises.

One month ago the USD/SGD was trading near 1.37240 and while this feels like a higher value which will not be struck near term, speculators should keep this upper resistance level in mind if they are convinced the forex pair will trend lower, as a way to create caution within their outlook. Selling the USD/SGD is a very speculative position today considering the mixed risk appetite currently within the marketplace, but if a stop loss is used wisely around the 1.36830 juncture, looking for additional downward momentum to be displayed cannot be faulted.

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Singapore Dollar Short Term Outlook:

Current Resistance: 1.36800

Current Support: 1.36500

High Target: 1.37000

Low Target: 1.364500

USD/SGD

Robert Petrucci
Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.

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