The USD/SGD continues to trade within the upper boundaries of its long-term technical perspectives, but some traders may feel the ability to wager on technical resistance.
On Friday of last week the USD/SGD touched a high of nearly 1.36600 briefly. While the upside movement did create a high above the marks seen on Tuesday of last week, the price action of the currency pair on Friday took place in the wake of geopolitical concerns which shook global Forex momentarily. The USD/SGD did come down from the high water marks and went into the weekend near the 1.36160 vicinity.
Volatility has been a factor in global Forex the past week as the U.S has produced higher than expected inflation data and then had Jerome Powell essentially say the Fed was in an uncertain position regarding interest rates. Financial institutions which have clearly become more cautious have been buying the USD/SGD even as it has banged up against resistance and often proven the technical ratios are vulnerable.
Has the USD/SGD Traversed Too High?
Speculators may believe the USD/SGD has been overbought, but they need to be careful. The ability of the USD/SGD to incrementally climb in yesterday’s price action, and as of this writing trade near the 1.36285 mark is a reminder risk averse notions are still strong in financial institutions. This Thursday the U.S will release Gross Domestic Product numbers, but they will also publish the GDP Price Index. These numbers will impact Forex and the USD/SGD.
Until Thursday’s statistics from the U.S are released it is likely the USD/SGD will test its current trading range as financial institutions wait for the important data to clarify insights. However, the fact that inflation has proven stubborn is likely not going to disappear overnight. The U.S will also release important PCE inflation statistics on Friday. Meaning the last two days of this week will affect today and tomorrow – likely producing cautious movement in the USD/SGD.
Range Test in the USD/SGD for the Moment
The USD/SGD is still within the higher elements of its long-term price range as it fluctuates below highs seen in late September and during October of 2023. While traders may believe the USD/SGD will not touch those heights, they should remember the Federal Reserve has been bet against heavily the past couple of weeks and this has caused volatility and steady buying of the USD/SGD.
- The USD/SGD has been able to push lower, but in the short-term the 1.36150 to 1.36375 marks may continue to be tested on a constant basis until more clarity is delivered via U.S economic data.
- The volatility seen the past week of trading should serve as a reminder for all speculators to use solid risk taking tactics. The USD/SGD will get volatile again.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.36310
Current Support: 1.36210
High Target: 1.36390
Low Target: 1.36125
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