The USD/SGD is trading near the 1.36060 ratio as of this writing after making a high for the week only a handful of hours ago when it challenged the 1.36175 area. Curiously near-term trading results have produced a rather solid-looking resistance fight the past handful of days even as the USD/SGD moves near these highs. While a one-week chart shows the USD/SGD is stronger, a one-month chart offers another perception and this is that resistance levels near 1.36100 to 1.36200 appear to be values where selling develops. It appears large players are positioning for the potential of lower moves in the USD/SGD over the mid-term.
While other major currency pairs have seen some selling develop against the USD in recent trading, the USD/SGD has been able to actually maintain a battle for highs. This calls into question financial institutions and their dynamics as they are confronted by a rather strong dose of risk-adverse conditions while possibly perceiving the USD/SGD remains overbought. The USD/SGD will prove extremely interesting today as a barometer for other major currencies. Volatility may become rather pronounced in the USD/SGD and the broad markets Forex today and tomorrow globally.
Important Inflation Data from the U.S Coming Today and Tomorrow
The U.S. will publish Consumer Price Index reports today, which will deliver important insights regarding current inflation levels. The U.S. Federal Reserve while holding its Federal Funds Rate in place on the 1st of November remains rather aggressive regarding its rhetoric. Weaker-than-expected inflation numbers today and via tomorrow’s PPI results would likely ignite potential selling within the USD/SGD and other major currencies. But this is a big ‘if’, because inflation has been extremely stubborn and it might prove to be only wishful thinking that inflation is going show a decline via the CPI and PPI reports.
Support levels are clearly near the 1.36000 level and short-term speculators are likely targeting this psychological mark. Trading today and tomorrow in the USD/SGD is likely to be rather volatile as a combination of U.S economic reports are studied and U.S Treasury yields are watched. While yields in U.S bonds did come down a bit yesterday, a sustained decline is certainly desired by Forex traders who want to sell the USD.
Nimble Trading and Solid Risk Management for the USD/SGD Needed
- Traders should not be overly ambitious with their trading positions today in the USD/SGD and be ready for volatility, particularly if surprises emerge via the CPI results.
- Tomorrow the U.S will issue the Producer Price Index statistics, but also the Retail Sales numbers will be published.
- Traders in the USD/SGD should watch the markets closely as risk appetite and risk adverse sentiment creates a battle for momentum. Choppy conditions should be expected today and tomorrow.
Singapore Dollar Short-Term Outlook:
Current Resistance: 1.36130
Current Support: 1.36000
High Target: 1.36295
Low Target: 1.35720
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