One week ago at this time the USD/SGD was near the 1.29570 ratio, as of this writing the currency pair is slightly below that mark as it trades around 1.29545. Yes, the USD/SGD has had a full week of results, sporting a high around 1.29890 on Monday, following a low early this past Friday when the 1.29400 level was briefly tested. The actual price differential in the USD/SGD has been polite this as financial institutions are clearly bracing for important developments later today.
The U.S Fed is expected to cut its Federal Funds Rate by 25 basis points in a handful of hours. However, what the Fed will say about its mid-term outlook is open for debate. While some analysts claim the Fed will have to remain very cautious about the potential for future interest rate cuts, it needs to be pointed out that a power shift in the Federal Reserve will develop in the next two months rapidly, this as Jerome Powell exits the Chairman’s job in May of 2026.
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Shifting Sentiment and the USD/SGD Near-Term
While an interest rate cut has certainly been valued into the USD/SGD already considering today’s FOMC decision from the U.S, what the Fed says about future interest rate cuts will be the spark that creates volatility over the next two days. A hint that additional interest rates are possible could send the USD/SGD lower. Although a concrete statement from Jerome Powell about another interest rate cut in early 2026 isn’t likely, if he doesn’t say it is out of the realm of possibility some financial institutions may believe the Fed could actually cut the interest rate within the next couple of months.
Day traders are advised to be cautious leading up to the U.S FOMC Statement. Technical traders may enjoy the next few hours, but they should remember larger players may be lurking. Certainly when financial institutions start to react to the FOMC decision and statement, the USD/SGD will become violent and risk management for small traders will be hard to control in the midst of the Fed rhetoric.
Tight Range and Test of Lower Ground
The USD/SGD has seen a tight range emerge the past week. The 1.29400 to 1.29900 levels will likely falter in the next handful of hours.
- Since the Fed’s upcoming interest rate cut has been anticipated, what day traders should be on the lookout for are negative opinions from Jerome Powell.
- But it is likely Powell will sound cautious as always.
- The question is if he will say there is a chance the Fed Funds Rate can be cut again in the coming two months.
- If he leaves enough room for interpretation open, that another interest rate may happen, the USD/SGD could move below 1.29400 and perhaps target the 1.29300 to 1.29100 levels.
- If he says an interest rate cut will NOT happen in the next two months, then the USD/SGD could move higher.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.29625
Current Support: 1.29530
High Target: 1.29910
Low Target: 1.29210
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