The USD/SGD is testing higher values, but has consolidated the past few days of trading within the upper limits of its price range.
Traders who have pursued the USD/SGD the past few weeks have certainly had their technical perceptions tested. The USD/SGD like most other major currency pairs has seen its strong bearish trend halted and a definite bullish reversal upwards take place since the 2nd of February when the currency pair was trading near the 1.30300 level. Traders have had to readjust their outlook for the USD/SGD and today will produce additional firepower in the currency pair.
The reason for this momentum higher has been because of the stronger than anticipated U.S. central bank rhetoric which came on the 1st of February, then followed by a better-than-expected U.S. job report and last week’s inflation reports. On Friday of last week, the USD/SGD attained a high of nearly 1.34090. The currency pair as of this writing is trading slightly above this mark near the 1.34100 ratios.
While the current value of the USD/SGD is trading near highs it has not touched since the 6th of January, the rather consolidated range the past few days highlights cautiousness by financial houses. However, traders should be ready for all signs of a tight trading range to evaporate in the coming hours, because the U.S. will release its Preliminary Gross Domestic Product results today.
Highs are certainly being tested now, but resistance should be watched near the 1.34175 to 1.34200 junctures in the short term. Leading up to the GDP report, speculators should expect to see new highs challenged but also anticipate swift reversals lower until the growth numbers from the U.S. produce more clarity. Choppy trading is very likely over the next few hours.
- If the U.S Preliminary GDP numbers come in with better-than-expected growth, it could spur the USD/SGD to higher altitudes and price levels from early January technically to be targeted.
- If the growth statistics come in weaker than estimated the USD/SGD could face a selloff that begins to test support levels quickly.
Traders who want to enter positions in the USD/SGD before the GDP data is released must understand they are gambling and need to use strict risk management tools. Volatility is certain to spike in the coming hours and the U.S growth data is certain to shake the broad Forex market and USD/SGD until going into the weekend. The bullish reversal higher demonstrated in the USD/SGD has been strong based on the promise of an aggressive U.S Federal Reserve monetary policy in February, betting against the trend before the U.S GDP reports could be very dangerous.
Current Resistance: 1.34165
Current Support: 1.33910
High Target: 1.34650
Low Target: 1.33240