If a day trader has turned their eyes away from the Forex market the past day and finds themself staring in disbelief at the value of the USD/SGD, they should feel assured that even if they had been paying attention to trading results they would still be amazed. The USD/SGD is near the 1.26115 mark as of this writing, but as you read this article you are urged to check the price to see where the market stands.
The USD has not utterly collapsed. However, the USD has slid downwards in Forex against many currencies and the USD/SGD has delivered quite a punch lower. The USD/SGD was trading near the 1.27000 vicinity on Monday of this week. On Friday, early in the day, the USD/SGD was around 1.27950. On last Wednesday the USD/SGD could be taken at 1.28500 on occasion.
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Downwards Velocity and Noise in Forex
The U.S Federal Reserve will be announcing their FOMC decision today. However, financial institutions are actually anticipating a cautious sounding Fed later today, one that will NOT lower its interest rate. Yet, folks are selling the USD as if something big has changed. Behavioral sentiment has certainly shifted. The question now is where support levels will start to be found.
The USD/SGD is trading at values it has not seen since 2014. That last sentence isn’t a typo. The movement of the USD/SGD in the past few days has broken through many support thresholds. Technical traders who decided to fight the trend have likely learned a difficult lesson. Day traders who simply followed the momentum are likely quite satisfied with the results in their trading accounts.
Historic Rout and Fear of Reversals
The move lower in the USD/SGD does mirror the results of other major currencies teamed against the USD. Forex volatility which has been lacking the past couple of years has delivered a massive wake up call to traders who had turned their attention to other speculative assets.
- While many people try to explain the sudden downwards drop of USD value, day traders are advised to remain calm and not believe everything they hear.
- Following the trend lower should be considered, but speculators need to use logical risk management and try not to get caught up in velocity that suddenly is going the wrong direction.
- At some point the USD/SGD may reverse upwards too.
- For traders who have heard about the Forex volatility and want to participate, they should make sure they are ready for potentially dangerous speculative days ahead.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.26130
Current Support: 1.26070
High Target: 1.26400
Low Target: 1.25800