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The USD/SGD has moved lower in early trading this morning and is within sight of interesting support levels, but market conditions are suspicious.
Bearish traders of the USD/SGD who have been trying to sell the currency pair consistently may be in a rather happy mood; this is after a strong reversal has been demonstrated since hitting a high of nearly 1.35740 on Friday. The current price of the USD/SGD is around the 1.34875 value with a solid bearish move having taken place early this morning. Yesterday’s low around 1.34800 is within plain sight.
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However, before USD/SGD jump onto the selling bandwagon and start chanting that a strong trend downwards is about to build, they should keep in mind that U.S. financial institutions are closed for the Independence Day holiday. Yesterday’s trading volumes were thin yesterday because many large U.S. trading houses created a large holiday weekend by simply giving Monday off to their workers due to today’s celebration. The USD/SGD has certainly seen downward movement but the question is can it be sustained?
Speculators who remain sellers may point to yesterday’s ISM Manufacturing Prices reading in the U.S. which displayed a sharper drop than anticipated. The ‘news’ that price pressure on manufacturers may have declined is intriguing because it may be a signal inflation is starting to reduce. If this proves to be the case with additional inflation data coming over the next couple of weeks, the U.S. Federal Reserve may be able to consider NOT raising the Federal Funds Rate on the 26th of July.
- The move lower in the USD/SGD has been solid, but it has been accomplished on light trading volume and should be given a skeptical thought.
- Speculators who want to gamble and look for a move upward based on the notion the USD/SGD is oversold should be patient, however.
- Solid risk management should be used to guard against sudden spikes in the USD/SGD today and tomorrow.
Traders should understand the remainder of the day may seem rather a quiet trading within the USD/SGD. Speculators who pursue the USD/SGD may use take profit orders to target nearby prices in order to cash out of ‘quick’ positions. Until full volume returns on Wednesday and Thursday, the USD/SGD could experience choppy conditions and sudden reversals. The lower movement in the USD/SGD the past two days is noteworthy, but until U.S. financial institutions return the downward momentum may prove to be an illusion with a sudden buying reaction developing later this week. Monitoring the USD/SGD over the next day and a half may be the wise thing to do while sitting on the sidelines.
Current Resistance: 1.34970
Current Support: 1.34835
High Target: 1.35215
Low Target: 1.34750
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