The ability of the USD/SGD to trade at depths not sincerely tested for two months has brought the currency pair back to lower technical considerations for retail traders.
- The USD/SGD currency pair has produced a solid bearish trend.
- The currency pair as of this morning is near the 1.34520 ratio and this follows a reversal upwards after Friday’s lows challenged the 1.34020 ratio a couple of times.
- While the move higher yesterday and early today may be a sign for some that the USD/SGD is now going to resume a track back up to the 1.35000 level, financial institutions may have other thoughts.
The move upwards the past day and a half of trading has not occurred with violence and may simply be a reaction to the belief the USD/SGD had moved lower too rapidly. Yesterday’s economic data from the U.S Empire State Manufacturing Index came in weaker than anticipated and today Retail Sales figures will be delivered. The continuation of weakness in U.S economic data if seen would likely create headwinds for the USD regarding upwards mobility.
USD/SGD Resistance Levels and Mid-Term Charts
The ability of the USD/SGD to trade within the lower depths of its mid-term price realms is clear from a technical perspective. Via a one and three month chart the USD/SGD remains solidly within its lower elements. Yes, some bullish traders may see this as an opportunity to look for upside, but they should consider resistance levels and probably keep their buying ambitions within the framework of quick hitting wagers that are merely seeking momentary reversals.
There are certainly no guarantees the bearish trend will continue in the USD/SGD, but signs are favorable from a behavioral sentiment mindset when combined with weaker U.S economic data which creates the perspective the Federal Reserve will have to become more dovish. The selling in the USD/SGD over the past week has priced in a September rate cut for the currency pair, the question is if financial institutions are pricing in another rate cut for November or thereabouts.
Consideration of Lower Moves for the USD/SGD
While some traders may be conservative regarding their thought concerning the possibility of the USD/SGD trading lower, short-term speculators may want to glance at six month charts to consider where the currency pair could traverse if U.S economic data continues to underperform. The USD/SGD looks to have a serious amount of support near the 1.34300 level, but in March of this year the currency pair tested lower values. If the 1.34300 falters in the near-term, consideration of the 1.34200 to 1.34000 marks below cannot be faulted.
- Yes, trading can produce reversals higher and perhaps financial institutions believe equilibrium for the moment has been found, but if additional impetus is ignited the USD/SGD could search out lower values.
- Resistance levels near the 1.34550 mark should be watched, if this ratio proves firm it could be a signal selling positions remain active.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.34540
Current Support: 1.34475
High Target: 1.34690
Low Target: 1.34125
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