The USD/SGD continues to challenge lower values as its bearish trend remains technically evident, as of this writing the currency pair is near the 1.27375 ratio.
The USD/SGD has created a solid bearish trajectory lower and is traversing values not seen since October and November of 2014, this is not a typo – not 2024. The USD/SGD is near the 1.27375 ratio as of this writing. On Wednesday of last week the USD/SGD was able to sustain values below the 1.28000 level. Yesterday the USD/SGD knocked on the door of 1.27000 before reversing slightly higher.
While some speculators may question how long the bearish momentum of the USD/SGD can last, perhaps it will be better to pull out long-term charts and wonder how low the currency pair can go. Traders should certainly not get over eager, reversals higher certainly are going to be seen intraday, and perhaps even over the near-term. However, the move lower in the USD/SGD has been steadfast. Yes, the currency pair is correlating to the broad market, but the Singapore Dollar has also been remarkably strong.
Short and Near-Term Risks in Coming Day and Week
Financial institutions are certainly leaning into a weaker USD centric outlook because of perceived interest rate cuts to come from the U.S Federal Reserve, but other complex reasons for the steady move downwards in the USD/SGD must be part of the equation too. Trade tariff considerations are likely part of the movement downwards – meaning financial institutions are not as worried about their outlooks. On the 9th of July the U.S will supposedly announce results on negotiations regarding tariffs.
Tomorrow the U.S will release its Non-Farm Employment Change numbers. However, the U.S is going into a major holiday weekend this Friday via its Independence Day celebrations. Forex volumes will begin to tapper off on Thursday and by Friday trading will be light. Day traders looking to pursue positions into the weekend will need to be cautious with the USD/SGD because some sparks of volatility could be produced as the market becomes thin.
Wagering on More Bearish Price Action
While it may be tempting to fight the current trend downwards because of a belief the USD/SGD has been oversold, this may be wrong. The USD/SGD has correlated to the broad Forex market and financial institutions around the globe may not be quite done selling the USD via their mid-term outlooks.
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- Perhaps this will change in the coming week if a risk event stirs the Forex cauldron, but while President Trump has a known characteristic to talk tough, he also is known to allow for more time to accomplish tasks – particularly regarding tariffs.
- Optimistic viewpoints are creating risk appetite and this may mean additional downside is possible in the USD/SGD.
- Traders should not target levels that are too far away, and perhaps may want to use slight moves upwards to pursue via targeted selling price action in the short and near-term.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.27480
Current Support: 1.27350
High Target: 1.27575
Low Target: 1.27010
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