The USD/SGD took a sudden dive on Tuesday as it went from the 1.28550 vicinity to abruptly challenging the 1.28250 realm. In early morning results the USD/SGD is near the 1.28375 mark.
Forex conditions globally are showing a bit of volatility early this week. The foreign exchange market has seen a great reduction in volatility across global FX pairs the past year and a half, but nervous financial institutions appear to be questioning their positions across the board. The USD/SGD abruptly dropped from the 1.28550 vicinity yesterday to the 1.28250 level. As of this morning lower realms are still being explored, but the 1.28375 ratio now being tested is above yesterday’s lows.
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The gold market appears to be at a fever pitch and global equity indices are showing bearish momentum. The USD/SGD is a solid barometer of Forex and its ability to also move lower yesterday was intriguing. As risk adverse conditions seem to have spiked the USD/SGD has gotten stronger, but this has also correlated to other major currencies versus the USD.
Many Explanations But Few of Them Can be Trusted
USD/SGD traders may believe nervousness stemming from U.S rhetoric about Greenland is a cause for volatility, but many other complex issues are scattered into the behavioral sentiment moving the broad markets. Day traders are advised to watch the USD/SGD and its correlation to the broad Forex market and keep an ear on news developments. Shifting sentiment is definitely a problem, but it is unlikely that one issue alone is causing the volatility in Forex.
Last week the USD/SGD was traversing around the 1.28800 realm rather stubbornly. The ability of the currency pair to not only sustain values below the 1.29000 level is important, but the sustained demonstration of moving below the 1.28400 mark this morning is crucial too. Yet, traders should be ready for intraday volatility which could develop in the next handful of hours.
Trump Rhetoric and the USD/SGD
The Davos summit in Switzerland is underway. Typically this is more of a sales event for brokers to pitch trading ideas to their clients than anything else. The speeches from Davos seldom cause the markets to actually shake violently, but brokers’ love to get their day traders excited about opportunities.
- However, speculators really need to pay attention to President Trump today in a few hours.
- The USD/SGD has certainly shown bearishness and it is traversing values seen just before Christmas and into the first week of January.
- Bearish traders may believe the USD/SGD has the capability of testing the 1.28000 mark like it did late in the first week of January.
- But speculators need to be careful, because volatility could hammer the markets today.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.28405
Current Support: 1.28340
High Target: 1.28590
Low Target: 1.28210
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