After coming within sight of the 1.36200 briefly yesterday, the USD/SGD ignited a swift and violent selling storm as support levels were brushed aside easily.
As of this writing, the USD/SGD is trading near the 1.35400 level with fast conditions dominating as traders try to find equilibrium. Yesterday did see the USD/SGD reach a high of 1.36200, but upon hitting this mark, a storm of selling was generated and support levels were penetrated violently. On the 20th of July, the USD/SGD traded near highs of 1.36950, but since then has seen resistance levels incrementally lower. Yesterday’s sell-off seems to have been sparked, when highs from the previous day almost exactly at the same value of 1.36200 were challenged.
Having endured a strong bullish trend since early June, the USD/SGD may have proven it reached an overbought apex on the 20th of July. This perception can only be proven over time and short-term traders cannot accept this as a fact, merely a consideration. However, the USD/SGD is now testing important support levels and its current values have the Forex pair testing mid-July prices.
If current support levels continue to be tested, speculators should keep their eyes on the 1.53360 to 1.35300 junctures. If these ratios prove vulnerable there is reason to suspect the 1.35220 value could become a quick focal point. While the USD/SGD is certainly a major Forex pair, it remains quite capable of delivering swift spikes. Yesterday’s demonstration when selling pressure mounted is a solid example of this dynamic.
Intriguingly, if the USD/SGD is going to unleash another round of bearish momentum there appears plenty of space it can seek downwards. Certainly traders cannot become over confident and too ambitious if they are sellers of the USD/SGD. Risk management is urged as always and the ability to cash out winning positions before they turn into air is always recommended. However, selling the USD/SGD within its current short-term trend and using tight stop loss orders slightly above present resistance levels could prove to be a worthwhile speculation if a conservative amount of leverage is used.
Yesterday’s sudden sell-off within the USD/SGD correlated with many other major Forex pairs. News that the U.S Senate is about to approve a costly infrastructure spending bill in the States may add a dose of fundamental reasoning into current market sentiment, which believes the bullish run made by the USD across the board for almost two months maybe running out of steam.
Singapore Dollar Short-Term Outlook:
Current Resistance: 1.35470
Current Support: 1.35360
High Target: 1.35650
Low Target: 1.35220