The USD/SGD has turned in a dramatic move lower to start the day, which builds on selling momentum generated since last Thursday.
As of this writing the USD/SGD is trading near the 1.33830 level in turbulent price action as the currency pair continues to display a bearish trend. Light holiday trading the past handful of days has certainly helped create volatility, and the USD/SGD touched values last traded in June of 2021 this morning on the surge lower. This essentially means technical traders looking for correlation to potential lower depths to gain a longer time perspective would need to look at 5-year charts.
The USD/SGD traded to a low of nearly 1.33650 this morning. After flirting with a high of about 1.35025 on Wednesday of last week, the USD/SGD has proven there is a determination to maintain its bearish trend lower which started towards the end of September this year. The USD/SGD was trading at a high of nearly 1.44950 on the 29th of September. The USD has been weaker across the board against many major currencies and the Singapore Dollar has certainly been one of the big winners as it has regained value via the selling of the USD/SGD.
Holiday Price Movements in USD/SGD need to be contemplated
While the move lower in the USD/SGD does look technically correct, speculators are warned not to get too excited about the current move lower regarding near-term potential. A lack of strong trading volumes in Forex has created a vulnerable market and it is possible when large financial houses step back into the trading landscape some reversals higher may develop. And this doesn’t mean the selling shouldn’t have happened, it simply means from a trading perspective the strong move lower may be overdone because of a lack of institutional buyers.
- Support currently near 1.33750 to 1.33700 should be watched, if these levels prove durable in the short term it could mean a slight reversal higher may develop in the short term.
- Traders who have a bearish perspective on the USD/SGD may be correct, but the currency pair may have been slightly oversold because of holiday trading conditions and caution is advised.
USD/SGD Remains Intriguing but Needs to be treated with Solid Risk Management
Having produced a flurry of selling the past three days of trading the USD/SGD may provide speculators with an opportunity to seek short-term reversals higher. The lower trend in the USD/SGD the past handful of days is noteworthy and a good outcome for bearish traders. If speculators want to keep pursuing selling positions they should use full risk management because a slight fight for higher values may develop short-term.
Singapore Dollar Short-Term Outlook:
Current Resistance: 1.33995
Current Support: 1.33725
High Target: 1.34390
Low Target: 1.33500
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