The USD/SGD has developed some early buying today, after testing lower values the past few days of trading this as cautious behavioral sentiment has likely crept into Forex.
After touching a low of nearly 1.32430 early on Tuesday, the USD/SGD has traded higher. Although the move upward has not been significant, there has been enough buying to perceive the current price action as cautious behavior that has filtered into the USD/SGD as important U.S Consumer Price Index statistics are awaited. As of this writing the USD/SGD is near the 1.32750 ratio with typical fast price action being demonstrated.
Since falling below the 1.33000 ratio last Thursday the USD/SGD has been able to test lower depths a few times in a strong fashion. The 1.32400 level in the past few days has acted as fairly durable support and it likely continues to remain a solid inflection point for traders with a bearish attitude about the USD/SGD. The currency pair has been able to reestablish some downward sentiment that has been displayed, but this also depends on timeframe perceptions.
As speculators and financial institutions wait on the CPI inflation data from the U.S. today, there is a strong likelihood that yesterday’s comments from FOMC voting member John William caused nervousness in Forex. The New York Federal Reserve President spoke about interest rates in a hawkish manner. Williams essentially told an audience that inflation remains a focal point and it has not been defeated yet. He added that the Fed has made no promises about what it will do with the Federal Funds Rate and remains open to voting for more hikes.
- If Consumer Price Index inflation data is stronger than expected today the USD/SGD might find some renewed buying strength.
- The 1.33000 ratio up above could prove to be interesting resistance if tested today, this if U.S inflation statistics are higher than anticipated.
The price range between 1.32400 and 1.32900 should be monitored. Technical traders may prove wise to take into consideration the fundamental data which will come from the U.S. in a few hours. Volatility could erase the rather comfortable range displayed the past couple of days. The USD/SGD is still within the lower boundaries of its three-month chart and any surprises from the inflation results in the U.S. later today could cause a breakout. Trades should be cautious if they are wagering on the USD/SGD before the CPI data and solid risk management will be vital.
Current Resistance: 1.32850
Current Support: 1.32525
High Target: 1.33650
Low Target: 1.32090
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