Safety means a lot to traders particularly as the weekend approaches. The Singapore Dollar even though it is considered a major currency globally, because of its demand via banking and international trade found itself losing value as Friday came to a close. The USD/SGD was bought and bounced its way towards important resistance near 1.3990 where it seemingly ran into a wall.
The past month of trading has seen the Singapore Dollar gain in value against the US Dollar. However, trading as the weekend approached proved again forex is vulnerable to sentiment and risks. The Singapore Dollar saw a sudden drop of value which tore apart short term resistance levels quickly and may make traders suspicious of current technical levels. A higher resistance juncture touched in early June appears reasonable near 1.4000. The question is how much leverage a trader is using and can they sustain such a large change in value should the USD/SGD continue to find buyers if they are short the currency pair?
Risk sentiment in the global markets remains fragile. Investors certainly see the news circulating in their midst which speaks about a second wave of Coronavirus and mortgage delinquencies in the US being on the rise. Indices worldwide appear to be calm for equities, but nervousness persists and this highlights a potential test of ranges for major forex pairs that may be the dominant theme for the next two days.
A look at a short term chart this morning for the USD/SGD shows selling has taken place for the currency pair and going into the afternoon in Asia the Singapore Dollar is starting to test support. The level of 1.3920 looks to be an attainable goal for short term sellers, but the juncture will have to get an additional push of shorts to create enough momentum to test levels seen before the weekend.
A five day perspective of the USD/SGD shows a significant amount of trading between the 1.3880 to the 1.3950 levels. This price action demonstrates where risk-reward sentiment may still be leaning. The current values of the Singapore Dollar are within a vicinity which may prove the lower levels will still prove a playing ground, meaning a short of the USD/SGD may be the best speculative position in the short term.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.3990
Current Support: 1.3920
High Target: 1.4000
Low Target: 1.3880
