The USD/SGD is a must watch currency pair for Forex traders now. The USD/SGD is moving around the 1.33925 price as of this writing after seeing an upwards trend created after the currency pair tested important mid-term support on Monday. The USD/SGD is important because it is a healthy reflection regarding financial institution behavioral sentiment regarding the potential of Trump administration tariff policies.
Singapore has the unique position of being seen as an intersection for world commerce between the East and West. Singapore’s financial system and trading ability is considered among the best in the world. The USD/SGD is a barometer therefore about global Forex outlook as major financial institutions all carry out commercial transactions in Singapore. The ability of the USD/SGD to test mid-term lows yesterday near the 1.33100 level, values not seen since the second week of November is intriguing.
Bounce Higher and Questions Regarding Near-Term Speculation
Early in the month of January the USD/SGD saw volatility frequented by sharp moves higher which challenged the 1.37000 level, the value saw a flirtation again in early February when President Trump sounded his tariff threats loudly. However, in the past weeks the USD/SGD has seen a selloff and it has returned to values not traded in a sustained manner since the second week of November.
Premium risk is still being priced into the USD/SGD and other major currencies teamed against the USD. The specter of economic sanctions in the form of tariffs still has financial institutions nervous. Trading in the U.S equity indices the past few days have seen declines and this may be a result of nervousness among investors. The USD/SGD did see some buying yesterday. The move higher may have been sparked by notions the currency pair was oversold, but it also may have been ignited because of risk adverse sentiment and a move towards the USD short-term because of concerns about Wall Street.
USD/SGD as a Barometer and Trading Tool
On the 12th of February the USD/SGD was near the 1.35800 vicinity. The move lower in the USD/SGD reflects the attitude of financial institutions quite possibly that the worse of the Trump Effect regarding Forex has been factored into currencies as tariff shadows loom. The threat is not over, but the mid-term outlooks of financial institutions may have digested the potential and priced in what they believe for the moment are worse case scenarios.
- The decline in the USD/SGD the past couple of weeks is likely a sign financial institutions are becoming more tranquil.
- The USD/SGD upwards movement yesterday may be a reflection of nervous via Wall Street results.
- This opens the door to the potential if U.S equity futures show signs of doing better that the USD/SGD may find more room to move lower.
- Short-term day traders should pay attention and factor in stock market sentiment.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.33970
Current Support: 1.33900
High Target: 1.341150
Low Target: 1.33460
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