The USD/SGD continues to prove short term bullish sentiment remains intact. In early trading this morning the forex pair is challenging one month highs. Technical traders are advised to look at three month charts in order to gain some additional perspective. If the USD/SGD continues to mount upward mobility a test of values seen on December the 22nd near the 1.33760 level could develop.
In order for further tests to be demonstrated higher, first the USD/SGD needs to break important resistance near the 1.33390 mark and then puncture another potential barrier around 1.33560. The sudden emergence of bullish sentiment which can be sustained has likely come as a surprise to some speculators who have grown accustomed to the long term bearish trend within the USD/SGD and merely looked at recent gains higher as cyclical movements which are natural in forex.
The ability of the USD/SGD to move higher and maintain a strong pace however may be causing perspectives to change among traders who have regularly sold the forex pair. Short term traders who have pursued short positions on a daily basis certainly need to now consider the possibility the USD/SGD has entered a consolidated phase in which its express train bearish direction has been put to a stop temporarily.
A look at a three month chart will also give perspective regarding where the USD/SGD’s current short term bullish trend may face stiff tests and finally reverse. While current resistance junctures short term look potentially vulnerable because of the recent upward volatility the USD/SGD has been able to exhibit, the 1.33760 mark could prove to be a significant testing ground. If this slightly distant resistance juncture is penetrated higher it is possible the USD/SGD could challenge the 1.34000 value.
From a technical perspective a retest of the 1.34000 price would not be a death notice for the long term bearish trend the USD/SGD has enjoyed. Speculators need to consider the large amount of value the forex pair has been able to move since late October when the USD/SGD was trading near 1.36850. The short term will remain challenging and traders should monitor the USD/SGD carefully and use limit orders, continuing to pursue bullish positions which challenge resistance above may prove effective until market sentiment changes.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.33390
Current Support: 1.33080
High Target: 1.33560
Low Target: 1.32720
