Although light holiday trading is taking place in Forex, the USD/SGD has seen its bearish trend remain steadfast. Speculators had a momentary scare early this week when a brief reversal higher challenged the 1.33000 level and above, but the higher reversal proved short-lived and a resolute decline quickly emerged again. In early trading this morning, the USD/SGD has brushed aside another important support ratio and is within the vicinity of 1.32490.
Interestingly, the support level which is likely being targeted by technical traders is the 1.32350 juncture. Speculators will need to look at long-term charts to see this number printed on their technical data. The 1.32350 mark was traded in the last week of April 2018. If this level proves vulnerable, technical traders will have an interesting decision regarding where to place take-profit orders, because the 1.32100 value looks like it will attract attention, but that may prove a road too far short term.
Speculators need to understand that the seemingly one-way track of the USD/SGD is not immune to reversals higher. Risk management needs to be used and an argument can even be made for attempting to buy the USD/SGD and look for small incremental climbs when the Forex pair touches important support levels, as it is doing now. Light holiday trading also makes the currency markets suspicious because a large Forex transaction can cause sudden spikes.
However, the bearish trend should not be disregarded and support levels do continue to look vulnerable. The USD/SGD is testing two-and-a-half year low water marks and the downward momentum may continue. If current support levels do prove weak and the USD/SGD remains on its bearish track, the values the Forex pair will be trading may spark concerns in Singapore, which relies on a significant amount of commercial trade and may not want the Singapore dollar to be too strong. However, because the weak USD is dominating the Forex landscape, the USD/SGD may continue to traverse lower still.
Selling the USD/SGD at the current price levels may look risky. Cautious traders may want to wait for slight reversals higher and have limit sell orders waiting to try and recapture the bearish trend when it re-emerges. However, the question is when the slight upticks will happen as holiday trading is taking place. Speculators should be patient and not rush into the market blindly, but continuing to pursue the bearish trend within the USD/SGD may prove to be worthwhile.
Singapore Dollar Short-Term Outlook:
- Current Resistance: 1.32690
- Current Support: 1.32350
- High Target: 1.32830
- Low Target: 1.32090
