The USD/SGD pair fell during the Tuesday trading session as the downtrend continued. While many of you probably don't trade the Singapore dollar, you should be aware the fact that Singapore is a major financial hub of Asia, and therefore represents investment in the region. By extension, the Singapore dollar does as well.
Unlike the Japanese yen, buying the Singapore dollar does not suggest a defensive position. Quite honestly, most traders would use the Singapore dollar as a proxy for the Chinese yuan. This is because a lot of Chinese businesses conducted via Singapore, and its large array of banking institutions.
In other words, when things are going well, the Singapore dollar tends to do fairly well also. The Singapore Monetary Authority does keep the Singapore dollar in a trading band against the US dollar, so this is somewhat manipulated. Their job has essentially been to keep the Singapore dollar from gaining too much ground against the US dollar. In other words, they are simply trying to slow the decline of the Dollar against their own currency. This is because they of course like the idea of exporting like everybody else in Asia.
Long-term trend
The long-term trend in this pair is most decidedly to the downside. This is why I like this trade, and why I like trading this pair to the short side. The 1.22 level is currently being tested, and as such I think we could eventually see lower prices. Quite frankly, I see the US dollar weakening against most currencies at the moment, and as such this pair should continue to fall.
You should be aware the fact that this pair tends to grind and then suddenly move. This is mainly because of the central bank and its trading range, but also the fact that this pair tends to be ignored by many traders. It also has a bit of liquidity issues during the US trading hours. The spreads will widen slightly, but it's nothing that you can handle. The spread in this currency pair during the most illiquid times is rarely above 9 pips. However, with this pair been so ill liquid at certain times of the day, I do suggest that you traded with more of a longer-term outlook.