The USD/SGD exchange rate remained under pressure this week as it fell for five consecutive days. It dropped to a low of 1.2955, its lowest level since October 29, and 1.10% below its highest point this month. It remains 5.8% below its highest point this month.
The USD/SGD pair reacted to some notabe announcements from the United States. A report released by the Fed known as the Beige Book showed that economic activity was muted in the past few weeks as consumer spending weakened.
The report also showed that employment decined in this period, raising the possibility that the bank will likely cut interest rates by 0.25% in December. This will be the third rate cut of the year.
Meanwhile, recent data show that Singapore’s economy has strengthened in the past few months. A report by the Ministry of Trade showed that the economy will grow by about 4% this year, up sharply from the previous guidance of between 1.5% and 2.5%.
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The report showed that Singapore’s economic activity expanded by 4.2%, helped by external demand, especially from the United States. It was also boosted by resilient local sectors like finance, transport, and manufacturing.
The next two days will be a bit muted for the USD/SGD exchange rate as there will be no macro data from the United States and Singapore. US markets will be closed for the Thanksgiving Holiday. While they wil be open on Friday, most large trading desks will likely be offline.
USD/SGD Technical Analysis
The daily timeline chart shows that the USD/SGD exchange rate has rebounded in the past few weeks. It has moved from a low of 1.2700 in July to a high of 1.3092, where it formed a small double-top pattern.
The pair has moved to the lower side of the ascending channel, which is alongg the 50-day and 100-day Exponential Moving Averages (EMA). It has also formed a bearish flag pattern.
Therefore, the pair will likely continue falling as sellers target the key support at 0.2900. This view will be confirmed if it moves below the lower side of the channel. A move above the psychological point at 1.3025 will invalidate the bearish outlook.
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