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USD/SGD Analysis: Surge Higher and Cautious Trading Attitudes Simmer

The USD/SGD has surged higher and kept its values in a sustained range after the U.S jobs numbers last Friday sparked buying momentum.

USD/SGD Analysis Today - 11/06: Surge & Caution (Chart)

  • The USD/SGD is trading near the 1.35320 ratio as of this writing with typical fast trading taking place.
  • The USD/SGD was trading around the 1.34395 ratio and testing the week’s low last Friday, but then the U.S jobs numbers came in higher than expected regarding the headline report with better job creation.
  • The USD/SGD followed the broad Forex market and witnessed a strong buying surge as cautious sentiment ripped through the air.

Trading yesterday and today has remained cautious and there have been little to no signs of a strong reversals lower in the USD/SGD. Financial institutions are clearly playing it safe until tomorrow’s U.S Consumer Price Index numbers and Federal Reserve FOMC meeting announcements. The inflation report tomorrow is certain to cause a bit of a storm early, but the Fed’s policy rhetoric later in the day will stir the Forex market including the USD/SGD.

Swift Reaction on Friday and Change of Sentiment in the USD/SGD

The USD/SGD went from being within sight of its one month lows on Friday to a rapid climb higher as behavioral sentiment shifted quickly. Financial houses have clearly been betting on a more dovish sounding Federal Reserve, and once again they were delivered a fresh reminder why the USD/SGD and all other currencies teamed against the USD this year have suffered choppy trading. U.S data remains complex and the results are not allowing for a clear outlook.

While USD/SGD traders may believe the currency pair has been overbought, financial institutions in the short-term may want solid data and dovish monetary policy statements from the U.S tomorrow before they try to sell. The 1.35000 level has once again become a strong indication of sentiment and for the moment the USD/SGD remains comfortably above this ratio as it actually trades within the higher part of its one month price range.

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    Risk Management and Coming Reactions in the USD/SGD

    Although traders will certainly react to tomorrow’s inflation numbers from the U.S, if the data comes in around what is expected all attention will turn to the Fed. But if the CPI numbers do come in weaker it could spark selling of the USD/SGDP, yet traders need to be reminded inflation data from the States has proven problematic all year and reactions to the numbers have caused Forex choppiness for the USD/SGD.

    • The Fed will not lower its Federal Funds Rate tomorrow, but if it sounds more dovish about the mid and long-term this could soothe nervous traders and help the USD/SGD lower.
    • Support and resistance levels will widen before the CPI data and the FOMC rhetoric on Wednesday.

    Singapore Dollar Short Term Outlook:

    Current Resistance: 1.35375

    Current Support: 1.35240

    High Target: 1.35490

    Low Target: 1.35090

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    Robert Petrucci
    About Robert Petrucci
    Robert Petrucci has worked in the Forex, commodity, and financial profession since 1993. Important aspects of his work involve risk analysis and advisory services. As an advisor in a Family Office he maintains a conservative approach for wealth management and investments. Robert also works in private finance with investors and companies delivering financial and management services.
     

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