The USD/SGD may prove to be a risk takers delight near term. The Singapore Dollar has been locked within an established mid-term bearish trend which traders have been able use to their advantage if they have pursued the USD/SGD with patience, but short term risk adverse conditions are escalating and now may be the time to consider looking for upside potential.
The bearish track of the USD/SGD should not be disregarded because it is unlike to suddenly disappear, there appears to be additional momentum the forex pair can generate downwards and new support levels which will be challenged. However, speculators who want to participate in quick pursuits may want to consider the possibility of chasing bullish reversals higher in the coming days.
Global equity markets are beginning to express nervous sentiment as the US election approaches. With only a week and half before the US election, investors are expressing caution and this has sparked risk adverse results for financial assets including forex. Investors do not enjoy the unknown and while many political polls are projecting President Donald Trump will lose the coming election, importantly nearly all the polls were proven wrong in the previous vote.
The concern regarding the election results may seem overstated to some experienced traders who believe the world of finance will continue no matter the outcome – and they are right. However, short term behavioral sentiment is affected by questions raised regarding this result which is not assured and certainly has an effect on trading conditions.
The USD/SGD has produced a solid bearish trend and its test of important support near the 1.35250 mark below earlier this month, and a recent test of support near 1.35350 yesterday clearly demonstrates the strength of the Singapore Dollar. There are good reasons to believe the USD/SGD will continue to challenge support levels which have proven vulnerable and possibly test values seen in late January, and may even test pre-pandemic coronavirus fear price levels eventually near the 1.34600 mark.
However, traders who believe short term sentiment is nervous and slight reversals will be demonstrated may want to test the waters for upside action. Traders may be tempted to buy the USD/SGG near the 1.35560 mark and wager on upside reversals which will test short term resistance levels.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.35730
Current Support: 1.35430
High Target: 1.35860
Low Target: 1.35260
