Technical traders need be ready to change their perspectives often when trading; they must be able to react to evolving circumstances. The USD/SGD is testing one-month highs, which may be creating the belief that resistance will eventually not hold and the Forex pair will test higher values. However, when looking at a three-month chart, it can be argued that the USD/SGD remains within the upper cycle of a strong, long-term bearish trend which is going to reignite and needs preparation.
The potential of the USD/SGD and its recent demonstration of testing resistance via its one-month chart offer speculators the opportunity to wager on reversals lower, which will test support that may be considered vulnerable. The past five days of trading have shown a capability to challenge lows, and traders who use solid limit orders via take profits have a chance to take advantage of what appears to be a short-term tendency of the USD/SGD to traverse its new higher range while showing some determination to move lower again.
Patience and a little bit of luck will be needed to sell the USD/SGD, but it appears to be the logical tactical decision. Until proven otherwise from a risk/reward perspective, the USD/SGD appears to have the greater potential to track downwards after resistance proves durable again. If current resistance is maintained, traders have a reasonable solid reason to expect another test of near-term lower values.
Traders may want to wait for slight moves higher which come within shouting distance of current resistance levels in order to trigger selling positions of the USD/SGD. However, risk appetite in global markets appears somewhat calm for the moment and, although there has not been exuberant buying on equity indices, sentiment appears to be indicating that a burst of optimism may be displayed near term.
The USD/SGD is definitely challenging higher values, but technically it can be argued that resistance has held recently and incrementally lowered. This suggests that the USD/SGD may see bullish moves which have been witnessed the past month run out of power, and allow the long-term bearish trend to be reestablished. Selling the USD/SGD could prove worthwhile short term and traders targeting support junctures around 1.33100 to 1.33000 cannot be faulted.
Singapore Dollar Short-Term Outlook:
- Current Resistance: 1.33300
- Current Support: 1.33010
- High Target: 1.33410
- Low Target: 1.32790
