The USD/SGD has traded in a rather cautious range the past handful of days and as of this writing is near the 1.28752 ratio, this as financial institutions are dealing with short-term nervousness.
After moving to long-term lower terrain in the first week of January, the USD/SGD has seen upwards momentum develop which has taken the currency pair back above the 1.28000 realm. As of this writing the currency pair is near 1.28752 with a moderately quick delivery of fluctuations. Financial institutions are dealing with concerns regarding the growing saga of Iran, and they are also trying to formulate what the U.S Federal Reserve will be doing mid-term.
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Yesterday’s inflation reports via the U.S PPI numbers delivered dual interpretations. This complicated things for the USD/SGD and all of Forex. There was U.S data released for both October and November. And the reports came with contradictory information which left analysts rather muddled. The October report came in higher via the PPI Core data, but the November statistics were lower. Meaning possibly that financial institutions after comparing the data felt this was a non-event. Sideways action.
Fed Public Debate and Iran Saga
But the Federal Reserve will be having an FOMC meeting at the end of January and there is also a very public debate raging inside the leadership ring of the Fed regarding interest rates. And because of this financial institutions are likely confused – and what do they do if they are confused? They – the financial institutions – are likely going to be cautious.
Add to the rather loud reality in the international sphere the Iranian situation, and this creates more reasons to be nervous. And what happens ladies and gentlemen when there is caution is that risk adverse trading starts – meaning the USD tends to get stronger. So the USD/SGD has climbed and did hit the rather easy psychological mark of 1.29000 yesterday. Yes, the USD/SGD has moved lower since then, but trading has been choppy and this is likely to continue today and tomorrow depending on changing news developments.
USD/SGD and Cautious Short-Term Attitudes
Because the U.S administration – the Trump White House – is being rather deceptive regarding what they plan on doing about Iran questions abound about what will happen next.
- The USD/SGD is not impacted directly by Iran, but the risk adverse reactions caused in the financial markets does have an effect.
- If USD centric strength develops in the short-term because cautious attitudes are rising the USD/SGD may continue to challenge highs.
- The question day traders will want to then ask is if the USD/SGD has been overbought and when can a legitimate downtrend start that is sustained?
- The USD/SGD does look too high, but global concerns have certainly caused buying in the currency pair short-term.
- Near-term speculators in the USD/SGD need to be careful and look for quick hitting trades if they insist on wagering today and tomorrow.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.28775
Current Support: 1.28730
High Target: 1.29100
Low Target: 1.28550
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