The USD/SGD has presented a rather polite price range the past week. Day traders who pursue technical gyrations may not agree with the remark above, but support and resistance levels have demonstrated some stability. The current price of the USD/SGD is near the 1.34175 level, this is after a reversal lower has taken place. The currency pair hit a high around 1.34560 yesterday, which challenged values seen on the 17th of November - this as the USD/SGD was tracking lower then.
Traders need to be ready for the USD/SGD to begin producing a wider price range today and tomorrow. The U.S will publish Consumer Price Index numbers today, PPI will follow tomorrow and a handful of hours after the Producer Price Index statistics are seen the all-important FOMC Statement will be released for consumption on Wednesday. And financial institutions will consume the results greedily as they trade on the Fed’s rhetoric late tomorrow.
Equilibrium for Now but Volatility is Likely Coming in the USD/SGD
While a range between 1.33700 and 1.34400 has largely been the dominant theme for the USD/SGD the past week with occasional outliers, day traders should not be comfortable. Technical and fundamental questions will be tested in the short and near-term. The U.S inflation data today and tomorrow is likely to create a test of technical considerations and volatility will probably erupt. The question conservative traders may be trying to consider is where the dust will settle when the CPI and PPI data followed by the U.S. Federal Reserve’s pronouncements are done with their show?
Until the inflation numbers and the Fed’s monetary policy statement are digested by financial institutions, speculators will see a frenzy of price action in the USD/SGD. While resistance near the 1.34200 level appears to be a target as of this writing, it will not be surprising to see waves of reversals appear in the USD/SGD during the next day and a half.
Short-Term Perspective for USD/SGD Speculators
- If a trader believes risk appetite is going to remain optimistic after all is said and done via the U.S data and Federal Reserve, they might expect the USD/SGD to see more selling. Confirming this notion may prove very difficult in the short-term.
- Traders are urged to look for quick hitting targets if they do not have deep pockets, because price swings are going to be fast if they materialize. Using technical resistance levels in the short-term as impetus to sell could also prove dangerous as the USD/SGD value range widens.
Singapore Dollar Short-Term Outlook:
Current Resistance: 1.34265
Current Support: 1.34110
High Target: 1.34670
Low Target: 1.33385
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