Speculators within the USD/SGD have experienced a rather tight price realm since Friday and will need to use technical considerations moving forward for a while longer. The USD/SGD was trading near the 1.34250 ratio late on Wednesday when the U.S. Fed made its monetary policy pronouncements via the FOMC Statement. The USD/SGD turned volatile as predicted, producing a swift and loud move lower upon the change of rhetoric from the Fed.
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Within one hour and a half, the USD/SGD plunged to the 1.33155 vicinities and began to feel its way around technically as financial institutions considered their next moves. On Thursday the USD/SGD traded in a rather steady manner but did move to a low of nearly 1.32550. As the day progressed the currency pair did start to incrementally rise in value, perhaps on the notion traders thought the lows of the USD/SGD were overdone. The USD/SGD is currently trading near the 1.33220 ratio.
USD/SGD Mid-Term Values and Consideration of What is to Come
Technical traders will see while looking at mid-term charts of the USD/SGD that the currency pair has now returned to mid-term values seen in early August. When the USD/SGD feel to its ultimate low this past Thursday it did touch marks not seen since late July. Bearish speculators of the USD/SGD may have ambitions of lower values for the USD/SGD and they cannot be blamed.
The mid-term outlook for the USD seems to be a weaker stance among many financial institutions. However, the short-term presents problems for speculators of the USD/SGD, because overly ambitious targets lower will likely not happen in the blink of an eye. The holiday season which is approaching will also make the Forex markets quiet, and traders will have to be careful of USD/SGD results which may produce quick blasts of price action mixed with inactivity.
Short-Term USD/SGD and Risk Potential
- While risk appetite does appear friendly and the USD may lean to towards a weaker stance, traders should not get overly confident in the USD/SGD bearish positions.
- The ability to climb higher since hitting Thursday’s lows may indicate for the moment financial institutions have found equilibrium in the USD/SGD.
- Price velocity lower will likely not produce the dynamic drops that occurred last week.
- Due to thinning holiday volumes which will develop, traders need to use solid risk management to protect against the potential of sudden bursts which can cause havoc for unprepared speculators.
Singapore Dollar Short-Term Outlook:
Current Resistance: 1.33325
Current Support: 1.33170
High Target: 1.33495
Low Target: 1.32990
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