After going above the 1.28400 level late on Friday the USD/SGD has shown selling pressure come back into the currency pair. As of this writing the USD/SGD is around 1.27675 with quick price action. However, the broad Forex market in general is starting to show less volatility the past day and a half and USD centric strength appears to be eroding. Certainly the Iranian war is still taking place and sudden noise can change sentiment fast, but calmer waters for the moment have been found.
The U.S Federal Reserve will release its FOMC Statement and interest rate decision today. But no one is expecting the Fed to lower interest rates today. A rather cautious approach is expected via Jerome Powell, and today it will be hard to blame him for a conservative attitude, given that the price of WTI Crude Oil if it remains elevated could cause inflation over the mid-term. The USD/SGD is near the lower part of its weekly chart.
Support Levels and Opportunities
Day traders still should remain cautious and not get overly confident about the ability of the USD/SGD to easily penetrate support levels below. Yet the 1.27600 ratio will certainly remain an interesting barometer, if this mark starts to see a challenge, some bigger participants may eye the 1.27500 to 1.27400 ratios. However, those lower levels could prove to be too ambitious for retail traders who do not have deep pockets.
Again, because of the Iranian war market conditions remain in flux. Global assets via large investors may look cheaper under the present conditions which could lead to risk taking sentiment building, but it is easier to take risks if you have a mid and long-term parameter. Quick changes in Forex conditions could still be sparked in the short and near-term, but the idea that traders are getting used to the current landscape may help bearish notions in the USD/SGD.
USD/SGD Trading Over the Near-Term
Speculating in the USD/SGD today and remainder of the week will certainly remain dynamic. However, USD/SGD traders can use barometers to gauge broad market sentiment.
If the price of WTI Crude Oil remains stable and does not jump above the 96.00 USD level, and U.S equity indices see signs of buying, this may open the door to the notion the USD/SGD can still go lower.
Yes, commercial interests in Singapore remain an important aspect for the currency pair, but in the near-term most of the broad Forex market is working on USD centric considerations.
Traders should use diligent risk management and be content with nearby price targets when wagering on the USD/SGD today.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.27690
Current Support: 1.27650
High Target: 1.27750
Low Target: 1.27510