The USD/SGD is showing an ability to test support levels as its bearish trend has seen sustained pressure downwards and financial institutions seemingly lean into a weaker USD centric notion.
The USD/SGD is near the 1.33100 price as of this writing with the currency pair having exhibited the capability to challenge lower ratios in recent trading. The speculative downwards trajectory of the USD/SGD continues to show signs that risk premium is being discounted in the currency pair as financial institutions may be willing to express more risk appetite.
The USD/SGD did move below the 1.33000 levels in recent trading on occasion, but the 1.32850 vicinity has created some buying price action. Yesterday’s early trading went below the 1.33000 as it did the past Wednesday. Financial institutions certainly still remain nervous about the potential of tariffs being spoken about by President Trump, but they are also starting to adjust to the noise being created, and are likely taking a pragmatic approach to their outlooks.
Federal Reserve and Coming Behavioral Sentiment
The USD/SGD was trading near the 1.34100 level on the 5th of March, but the currency pair has shown a healthy amount of resistance since then and incrementally powered lower. The last time the USD/SGD traded around its current values in a sustained manner was in the second week of November, and this was when the currency pair was suffering an upwards trend from below the 1.31000 ratios seen in October.
Traders should not get overly confident about the downwards price action in the USD/SGD. Reversals higher are still a danger. The U.S Federal Reserve will issue its FOMC Statement tomorrow, but no change to interest rate policy is expected. In fact, the Fed is anticipated to be quite cautious regarding its statements made. But financial institutions have braced for the lack of an interest rate cut already. What financial institutions want to know is what the outlook is, and this is the trillion dollar question in Forex.
USD/SGD Near-Term Speculation in Shadow of Fed
What will be important in the coming days will remain President Trump and how financial institutions react to his policy and rhetoric. Tariffs are still being discussed but reactions have started to ease in Forex and the USD has certainly become weaker.
The trend lower in the USD/SGD correlates to the broad market and if the 1.33000 level can be broken and sustained that would be intriguing, but it might prove hard to accomplish in the short-term.
In the coming days the USD/SGD may remain choppy, but within its lower price elements, and wait for more impetus from changing outlooks.
Day traders should be cautious the next couple of days and be willing to test perceived technical support and resistance levels.
The trend lower appears sincere, but could still cause problems if large players feel the USD/SGD has been oversold.
Singapore Dollar Short Term Outlook:
- Current Resistance: 1.33140
- Current Support: 1.33065
- High Target: 1.33350
- Low Target: 1.32880
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