The old saying that the trend is your friend in forex is understood by traders. The momentum of the USD/SGD has shown buyers that the US Dollar remains active in the currency markets. However, after a couple of days in which the Singapore Dollar has battled with resistance levels, an opportunity may be developing to look for a reversal and tests of technical support junctures.
The resistance level of 1.3960 proved strong yesterday and this remained the story early this morning. It certainly doesn’t mean the 1.3960 can’t be broken upwards and that the Singapore Dollar will not lose any further value against the US Dollar, but it does give traders with the belief the USD/SGD should be sold some ammunition to begin trying to look for downward movement.
Current support for the Singapore Dollar appears to be near 1.3920. This support level looks rather vulnerable when a five-day chart is looked at and traders see there has been plenty of price action for the USD/SGD around the 1.3860 value up to the 1.3900 mark. Traders may want to consider selling the USD/SGD around the 1.3940 to 1.3950 level.
The Singapore Dollar has lost value in the past couple of trading days. However, there has been plenty of price swings within the USD/SGD and there appears to be very strong resistance around the 1.3980 level which was touched a couple of days ago. This highlights the speculative potential that the upside for the US Dollar versus the SGD doesn’t have much room to traverse higher; meaning the real opportunity for traders may come with downside action.
The US Dollar has found buyers in forex the past couple of days. However, trading is never a one-way street and markets do reverse every day. The USD/SGD looks like an attractive selling opportunity short term for traders with a speculative taste. Current trading values suggest that stop losses placed around the 1.3980 level may allow for enough room to explore the potential of shorting the USD against the Singapore Dollar and look for support ratios to prove vulnerable over the next couple of days.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.3970
Current Support: 1.3200
High Target: 1.3990
Low Target: 1.3880
