The USD/SGD is trading near the 1.34840 mark as of this writing with price velocity rather quick for speculative traders willing to wager. Nervous market conditions remain in evidence early today as financial institutions are still trying to guess what moves the U.S Federal Reserve will make next week, regarding interest rate policy in the wake of the Silicon Valley Bank bankruptcy and other U.S banks in rather vulnerable positions.
Last Thursday and into early Friday the USD/SGD was in the midst of a rather durable bullish run higher, based on the notion the U.S Federal Reserve Chairman had continued to speak aggressively about the pursuit of higher interest rates. This culminated in early trading on Friday with a high of around 1.35755 being seen. And then suddenly, the wheels fell off of the broad marketplace and Forex like all financial assets became chaotic and dangerous as the Silicon Valley Bank crisis ripped through the air and a fear of global exposure caused bedlam.
USD/SGD Reversal Lower Remains Nervous and Trend in Question
Traders counting on the U.S Federal Reserve to entirely stop their interest rate hikes next week should be careful. While it appears financial institutions may have priced in a pause of interest rate hikes from the U.S. central bank, there are no guarantees. Yes, it seems extremely unlikely the Fed will hike borrowing costs by 0.50% as feared only last week, because of Chairman Powell’s rather aggressive testimony last Tuesday and Wednesday in Washington, D.C, but while circumstances have changed dramatically clarity is still lacking.
- U.S Consumer Price Index numbers will be published today and the statistics could cause rapid and dangerous reactions if inflation remains stubborn.
- The U.S. Federal Reserve is in a dangerous position and if inflation proves stronger than anticipated, financial houses may believe the Fed could still raise the Federal Funds rate by another 0.25% on the 22nd of March.
USD/SGD Technical Support and Resistance Levels could Prove Wide Later Today
Traders should anticipate volatile price action in the coming hours as the financial house brace for the U.S CPI inflation data. The results from the Consumer Price Index readings will affect the USD/SGD and the broad markets. It is possible that a stronger number could spark a comment from the U.S Federal Reserve if the U.S. central bank feels it needs to calm a nervous marketplace.
Traders who want to bet on more downside in the short-term for the USD/SGD should be extremely careful. Bearish short-term speculators may be proven correct, but the past couple of days of trading have highlighted dangers abound and will continue in the near term. Risk management is essential and traders should be cautious.
Singapore Dollar Short-Term Outlook:
Current Resistance: 1.34910
Current Support: 1.34675
High Target: 1.35120
Low Target: 1.34390
Ready to trade our Forex daily forecast? We’ve shortlisted the best Forex brokers in the industry for you.