The USD/SGD has regained strong momentum downward and its ability to sustain lower values should be watched intently. The Forex pair is challenging late January depths, before it suffered a strong reversal higher which may have hurt speculative bears.
However, the past week has seen the USD/SGD firmly chip away at support levels and prove them vulnerable. The current price of the Forex pair this morning may cause nervousness among short-term traders who got caught on the wrong side of trades in late January, but it may also be an opportunity to take advantage of another decline if bearish sentiment continues to be generated.
The USD/SGD is within a crucial value range, and if values can be sustained and resistance becomes durable, technically the Forex pair has the potential to traverse lower based on mid-term charts. In early January, the USD/SGD was trading near 1.31600, which may give speculators more impetus to contemplate the potential of lower targets.
The rapid move of the USD/SGD may raise the suspicion among traders that a reversal higher is a logical wager. Aiming at resistance near 1.32590 may prove to be a logical speculative bet, but if a trader pursues buying positions for higher moves they should be ready to cash in winnings with take-profit orders actively working. Global risk appetite appears optimistic and with solid investment sentiment showing its power in the major equity indices, there is reason to suspect that the USD may continue to falter in Forex against many currencies.
The USD/SGD has enjoyed a long-term bearish trend, but it was certainly interrupted in January as the Forex pair proved it had the capability of climbing and demonstrating bullish power. However, speculators may believe that the bullish ability of the USD/SGD has run out of power. Yes, there will certainly be reversals higher which are a natural characteristic of Forex, but if resistance levels prove adequate in the short term, this could indicate there is a chance another leg down will develop.
After breaking through support in such a rapid manner the past few trading sessions, traders may be cautious. Selling the USD/SGD on slight rises in value via limit orders and pursuing downward momentum when resistance levels are challenged is one tactic that may prove worthwhile. Short term, the USD/SGD has re-established its bearish trend and it may have additional room to decline.
Singapore Dollar Short-Term Outlook:
- Current Resistance: 1.33590
- Current Support: 1.32400
- High Target: 1.32730
- Low Target: 1.32280
