The past five days of trading have seen the USD/SGD challenge a wide range and early this morning another trend needs to be translated.
Technical traders have been challenged by a wide range within the USD/SGD the past five days. In the middle of last week the Singapore Dollar was near important support levels and then witnessed a strong countermove higher as the USD/SGD was bought. The strong bullish move higher tested important short term resistance late last week as the Singapore Dollar traded near the 1.37900 level.
However, since reaching the loftier resistance levels which were last seen late in July, the past day and a half of trading has produced a reversal downwards. Speculators have had plenty of things to consider regarding the USD/SGD while the forex pair reflects global risk appetite. Equity markets worldwide have also seen roller coaster type of action the past week and traders should be prepared for further choppy trading.
Short term the USD/SGD is near important support levels as mixed sentiment seems to be the flavor of the day as investors prepare themselves for the next act from US equity indices. The Singapore Dollar is within a vicinity of 1.37160 as of this writing with fast conditions, and its range appears to be 1.37140 to 1.37330. However, this is still a rather wide short term price band for the USD/SGD and represents it current volatility.
After testing critical support just a handful of days ago, the USD/SGD has shown it is capable of producing solid bearish momentum mid-term. But the past few days of trading also shows what happens when risk adverse notions arise in forex and the sudden reversals that are possible. Speculators will need to gauge their perceptions accordingly. Quick trades looking to take advantage of rapid moves may be the way forward for speculators, but they will have to be keenly attuned to the USD/SGD and be able to strike quickly. Stop losses should be used certainly, but they should also give a trader enough breathing space to let a trade work. A conservative amount of leverage will be a good idea under the current trading circumstances too.
Speculators who believe the bullish move of the USD/SGD was too strong and that a reversal downwards will continue may look to sell the USD/SGD today. If a trader chooses to sell they should use limit orders and hope to catch an emerging trend which develops downward and dares to target the 1.37070 level.
Singapore Dollar Short Term Outlook:
Current Resistance: 1.37390
Current Support: 1.37070
High Target: 1.37700
Low Target: 1.36870