Even as its government and private analysts admit Singapore’s economy is suffering setbacks because of knock-on effects from coronavirus the USD/SGD has tested support levels as selling of the forex pair remains steady. The past five days have produced a consolidated range for the Singapore Dollar, but the USD/SGD has created lower resistance levels and its current support levels via technical charts appear to be vulnerable.
Speculators with a desire to get into the USD/SGD may be tempted to look at the 1.39350 to 1.39400 as logical junctures to place stop-loss orders if they are going to try and short the forex pair at its current values. Asian markets have opened with mixed results this morning as financial institutions take a wait and see approach as they await the United States to begin trading. Last week’s trading worldwide was cautious but a hint of optimism continues to simmer in equity indices.
Support for the USD/SGD around the 1.38900 area could prove critical; if the mark is broken downwards traders may believe another test of the 1.38750 mark could develop. The level of 1.38750 appears to be an inflection value for the Singapore Dollar because in the past month the value has been touched three times and produced a reversal of buying for the USD/SGD consistently. However, in early June trading, the Singapore Dollar did find even stronger values and traded near the 1.38300 levels for a couple of days.
If a trader is looking for support levels below the 1.38500 level for the USD/SGD, this could prove too optimistic and open speculators to the threat of reversals. Traders need to have rational goals while speculating. Current support levels do look vulnerable, but the Singapore Dollar is not a candidate to suddenly find a surge of value against the USD in a vacuum. While risk appetite certainly appears to be ready to participate within the global markets and the US Dollar has shown some signs of weakness in forex, traders should nevertheless use limit orders to look for short term profits cautiously.
Selling the USD/SGD appears to be a logical choice for speculators. Support levels show vulnerability, and stop losses slightly above what appears to be rather solid resistance will provide a good risk management tool.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.39220
Current Support: 1.38900
High Target: 1.39370
Low Target: 1.38750
