The USD/SGD has seen its value begin to consolidate this week as it continues to trade near important support levels.
The USD/SGD has begun to show signs that its value may be reaching an accepted equilibrium and has demonstrated a rather tight range recently. The Singapore dollar, however, continues to trade near important support boundaries and it is testing values it has not traversed since June of 2018. The strong value of the Singapore dollar should be monitored closely within its current price vicinity, because if it were to break support and move lower, it would set off a test of a range which the Singapore government may not favor.
The USD/SGD has not only regained all of its lost value when the heightened fears of coronavirus caused havoc, but it has recovered long-term value too, and is testing a Forex price which may be considered too strong by Singapore. Technically, the USD/SGD is hovering over important long-term support and speculators need to take into consideration that the current price range of the Forex pair may be a place which finds support and resistance junctures it can comfortably traverse.
Taking into consideration the rather dovish policy of the US Federal Reserve, however, the USD/SGD may find it has more room to roam downwards mid-term. Traders should consider using limit orders within the Forex pair, which takes advantage of its current range, and seek short-term reversals as support and resistance levels prove adequate. However, speculators need to keep their eyes open for signals that the USD/SGD could resume its bearish trend, which has been strong.
If the support levels of 1.33660 to 1.33520 begin to look vulnerable, the Forex pair could make a push towards lower values. One ingredient traders will need to watch - besides their technical charts - is the amount of risk appetite which is stirring within international equity indices. If equities remain within the grasp of positive momentum, the USD/SGD may ignite to lower depths.
Traders who believe the bearish trend will continue for the USD/SGD may want to wait for slight reversals higher and then sell for the time being. Yes, the USD/SGD could produce a swift round of downside momentum short term, but it may have to see an accumulation within its current price range and sustained value below the 1.33800 mark to ignite the next big move. Until then, the USD/SGD should be considered a short-term trade for speculators looking to take advantage of small reversals within its current and firm range.
Singapore Dollar Short-Term Outlook:
- Current Resistance: 1.34020
- Current Support: 1.33660
- High Target: 1.34180
- Low Target: 1.33520