The USD/SGD has bolted through support levels in early trading this morning and brushed aside many obstacles. Financial institutions have a clear predictive looking glass into the next few years via the results from the US election and this has caused many forex positions to be activated. The USD/SGD is testing support it has not seen since June of 2018.
Speculators are faced with a decision to try and jump on the express train which is demonstrating a large amount of strength for bearish USD/SGD positions or attempt to be contrary and look for reversals higher based on the thought the forex pair will need to stop occasionally and back up. The speculative playing field in the coming few weeks is likely to provide traders with plenty of opportunities and technical charts will provide interesting perspectives as trends gain full force.
Speculators should remember the USD/SGD has been enjoying a serious bearish trend for a while and the victory for President-elect Joe Biden will not diminish this narrative. In fact long term investors and financial houses may be counting on a weaker USD as stimulus packages and costly programs are put to the fore by progressive politicians who will need to figure out how to pay for the costs. The US Federal Reserve is likely to remain dovish for a long time due to change in the White House administration.
However, speculators will still be confronted by changes in direction. The express train that has clearly been seen this morning is not going to be a one way track constantly. Support and resistance levels will certainly be seen and traders will need to be careful regarding their wagers concerning course. Yet, the overwhelming feeling is that the USD/SGD may continue to see bearish momentum develop.
Selling the USD/SGD on this strong downward trend may feel dangerous because of a natural inclination not to trust a path which has been so abrupt. The key piece of the puzzle will be to watch trading within the forex pair and look to see if the Singapore dollar sustains its current price levels without too much exuberant reactions. The USD/SGD will likely need to catch its breath, which will give speculators an opportunity to consider pursuing more bearish momentum short term.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.34450
Current Support: 1.34150
High Target: 1.347700
Low Target: 1.33900
