The USD/SGD is near the 1.33900 ratios as of this writing. The currency pair did hit a low of nearly 1.33700 yesterday. The ability of the USD/SGD to stage a slight reversal higher comes amidst a lack of clarity regarding the U.S Federal Reserve’s monetary policy statement which is set for tomorrow. Not only do financial houses not know what the Fed is going to say, they are unsure if there is going to be an interest rate hike.
Technical traders of the USD/SGD can clearly see the currency pair challenged lows yesterday that had not been seen in one month, but the volatility the past week of trading as a bearish trend has been exhibited has not been a confident one. Global financial houses may believe the U.S Federal Reserve should pause its interest rate hikes momentarily, but up until now there is no certainty this will occur. Thus, the stage for a rather intense near-term period of USD/SGD trading should be expected.
Support Levels in the USD/SGD may Look Attractive but Remain Speculative
Support levels of 1.33800 to 1.33700 may appear attractive to speculators who pursued the strong bearish momentum of the USD/SGD which was generated for a considerable amount of time until early February. However, global economic conditions have certainly gotten more fragile as the global banking sector has suddenly become a source of nervousness. Financial houses by selling the USD/SGD are showing what they think the U.S. Fed should do tomorrow and that is to stop raising the Federal Funds Rate at least momentarily.
If the U.S. Fed were to halt its interest rate hikes, the broad marketplace may look upon this optimistically and believe the U.S. central bank is reacting to the current behavioral sentiment with a cautious eye. But if the Fed decides to go ahead with an interest rate hike this could cause financial institutions to react in a rather aggressive manner.
- The potential for consolidated trading in the USD/SGD exists for short-term traders, but they should remain careful and use risk management wisely when betting.
- While shadows of doubt remain regarding what the U.S. Federal Reserve will do next remains, this might create a potential to try and ‘scalp’ limited reversals in the USD/SGD in the short term taking advantage of narrow support and resistance levels.
Calm Results Today will become Violent Conditions Tomorrow in the USD/SGD
USD/SGD traders should monitor developing news along with technical results within the current price range of the currency pair. Although the USD/SGD may present a rather calm-looking trading landscape early today, Forex conditions are bound to become quite volatile as the clock ticks and the U.S. Federal Reserve delivers its monetary policy decision and outlook tomorrow.
Singapore Dollar Short-Term Outlook:
Current Resistance: 1.34050
Current Support: 1.33850
High Target: 1.34260
Low Target: 1.33690
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