The USD/SGD is near the 1.29220 ratio as of this writing. Yesterday’s low around the 1.28700 ratio traversed values not seen since the first week of October.
After touching highs on the 21st of November the USD/SGD is once again traversing within a known lower price range. Yesterday’s low of nearly 1.28700 challenged values not seen since early October. After two and half months of uncertainty and choppiness it appear financial institutions are once again tending to believe mid-term outlook for the USD is weaker.
The USD/SGD continues to be a solid barometer of USD centric price action in the broad Forex market when comparing the Singapore Dollar to other major currencies. Trading in Forex will become a bit choppier over the next two days, this as financial institutions start to position themselves ahead of the holiday season. The ability of the USD/SGD to comfortably make technical support levels appear vulnerable is a signal large traders tend to believe lower trends are favorable via speculative outlooks.
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Reversal Higher Yesterday a Normal Reaction
Yesterday’s reversal higher after lows were touched by the USD/SGD simply shows that financial institutions reacted in mass to a ratio they likely perceive as being oversold territory for the moment. Short-term traders may want to use the 1.29200 level as a lynchpin today regarding price action. Bids and asks are fast in the USD/SGD currently. Traders should also watch U.S equities – particularly the Nasdaq 100 – to monitor caution in the broad financial markets.
If the 1.29200 level begins to see sustained trading below this would indicate that the USD/SGD is still perceived as being high. However, the rather incremental and consistent selling in the currency pair which developed since the 8th of December may start to cause some conservative viewpoints to filter into the USD/SGD. Particularly as the holiday season approaches and lighter trading will start to take place in Forex, perhaps the USD/SGD’s current value range will be seen as fair equilibrium. If U.S equities see a selloff, this could limit risk appetite in the markets and make the USD stronger in the near-term.
Testing Near-Term Range and Sentiment
The Fed’s interest rate cut last week was expected. The fact that Jerome Powell remained cautious regarding FOMC interest rate outlook was not a big factor during the Fed Chairman’s Press Conference.
- Financial institutions know that Jerome Powell is going to lose his ability to control Federal Reserve monetary policy rhetoric in the coming months.
- The USD/SGD being a key barometer of USD centric sentiment in Asia is a solid looking glass for all of Forex.
- The ability of the USD/SGD to incrementally move lower and for the Singapore Dollar to show strength is important.
- The coming two days may prove to be rather conservative paths for financial institutions as they simply situate themselves ahead of the holiday season.
- Day traders should not be overly ambitious regarding their targets for the USD/SGD the remainder of this week and be willing to look for quick results.
Singapore Dollar Short Term Outlook:
- Current Resistance: 1.29255
- Current Support: 1.29195
- High Target: 1.29350
- Low Target: 1.29050
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