The USD/SGD has sustained its higher price range in early trading this morning and is traversing near the 1.35300 level as of this writing. The ability of the USD/SGD to maintain its value after surging on Tuesday highlights that financial houses in Asia are taking the U.S. Federal Reserve Chairman’s hawkish rhetoric seriously. After trading at a low around the 1.30325 mark on the 2nd of February which was a value not seen since January of 2018, the USD/SGD has correlated to the broad Forex market and reversed higher the past month.
While the USD/SGD trades within the current higher band, contrarians may be tempted to believe the USD/SGD has been overbought. However, this may be wrong-headed, what may in fact be happening is that financial houses are looking at the current values as a consolidation point before tomorrow’s rather volatile impetus hits Forex.
The U.S. will publish Non-Farm Employment Change and Average Hourly Earnings statistics tomorrow. The hiring and inflation numbers are definitely going to cause the USD/SGD to become fast, and traders will need to have their risk-taking tactics ready if they are pursuing the currency pair.
USD/SGD Challenging Values Last Seen in December 2022
The USD/SGD is now traversing highs it has not seen since the third week of December. The bearish trend created from late December to early February is evidence financial institutions believed a dovish U.S Federal Reserve would be seen and U.S interest rate policy would lessen.
However, the past month has poured cold water on the notion the U.S. central bank is about to become less hawkish. And testimony given by Fed chief Jerome Powell the past two days has created more nervous sentiment for the USD/SGD and broad forex market creating bullish momentum for the USD.
- If U.S. hiring shows a stronger-than-expected number and earnings data is not weaker than anticipated, the USD/SGD could see more buying tomorrow.
- If near-term resistance starts to get challenged before the U.S data release tomorrow, this may be a sign financial houses are positioning for more upwards price action.
Speculative Support Levels and the Notion the Bullish Trend is not Finished
Speculators who believe the USD/SGD may still have room to traverse higher can take a cautious approach to trade in the short term. The USD/SGD may find consolidation dominates today as large traders brace for tomorrow’s data. If current support levels prove durable, this might provide traders with an opportunity to buy at perceived technical lows and look for narrow upside wagers. However, traders need to understand that as the U.S data approaches tomorrow conditions will become fast and dangerous.
Singapore Dollar Short-Term Outlook:
Current Resistance: 1.35420
Current Support: 1.35165
High Target: 1.35870
Low Target: 1.35020
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