The past week and a half of trading within the USD/SGD has produced a renewed cycle of bearish momentum. The Singapore Dollar is testing important support and psychologically the target of 1.36000 is likely weighing heavily on programmed trading software below as the juncture comes into sight once again.
However, the past day and a half of trading should serve as a reminder to all speculators that forex and global markets can be hit by surprises that are hard to predict. News regarding the health of President Trump caused a large and sudden crisis in the worldwide marketplace early on Friday, as reports about him being infected by coronavirus were confirmed. The USD/SGD did see a burst of risk-averse trading flourish as the 1.36750 mark was tested above.
As the markets began to calm down and regain equilibrium the USD/SGD did return to values which were seen before the Trump news hit the forex markets. After investors were made sedate they then waited for the jobs report from the US which then turned in what can be interpreted as positive results. The data from the US added to better global risk appetite and the USD/SGD bearish momentum gained further steam downwards.
As of this morning, the USD/SGD continues to test support and low watermarks which were challenged in mid-September may be a focus again for sellers who believe the 1.35600 support level is a tangible goal. To accomplish these stronger values for the Singapore Dollar, the US Dollar will have to resume additional weakness and risk appetite globally will have to continue to build solid momentum, and this will likely not happen overnight. News about President Trump this morning seems to be optimistic and this may help investors stay comfortable, but traders and financial institutions do not like the unknown; fear of unexpected outcomes can create dangerous conditions in the marketplace.
If forex markets remain calm near term, the USD/SGD may continue to see its bearish trend provide an opportunity to chase lower values from the forex pair. Selling the USD/SGD around the 1.36280 to 1.36350 range and looking for downside action is a reasonable viewpoint. However, considering the potential for sudden surprises, speculators will be wise to use limit orders and their risk management astutely.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.36300
Current Support: 1.36100
High Target: 1.365100
Low Target: 1.35990
