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The USD/SGD has proven slightly choppy the past two weeks as it has incrementally climbed higher since falling below 1.320000 on the 14th of July.
Day traders pursuing the USD/SGD have likely found challenging conditions in the past couple of weeks within the currency pair. Yes, the USD/SGD did come off highs early this morning which touched the 1.33250 vicinity, but traders have certainly had their short-term perspectives challenged technically. Since going below the 1.32000 ratios on the 14th of July and hitting the 1.31700 level, the USD/SGD has shown a tendency to reverse higher after selling spurts.
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However, the USD/SGD technically when a long-term chart is inspected is still within the lower boundaries of its price range. Nervous conditions exist because of the central bank activity which will come from the U.S Federal Reserve tomorrow, the ECB on Thursday, and the BoJ on Friday. Financial institutions are bracing for a rate hike from the U.S., likely suspecting one will come from Europe, as the same financial institutions via their outlooks may believe we are approaching the end of interest rate hikes.
While rather choppy prices have been seen in the USD/SGD, they have not exactly been volatile unless a day trader is over-leveraged and without proper risk management. The ability of the USD/SGD to climb higher and come within sight of the 1.33250 level early today, may have been a warning sign regarding an expanding range while the U.S. Federal Reserve lines up for its FOMC Statement tomorrow. Traders need to be braced for the potential of velocity increasing in the USD/SGD.
- A range between the 1.32000 to 1.33000 regions should be watched today and tomorrow. Any trading above 1.33000 may signal financial institutions are nervous, but price levels above this ratio may also prove to be a rather speculative selling opportunity.
- The Federal Reserve is likely to raise interest rates by 0.25% tomorrow, but it is the Fed’s outlook via the FOMC Statement which will cause turmoil.
Traders are cautioned to use solid risk-taking tactics today and tomorrow. Conservative speculators may find the most comfortable seat is on the sidelines while watching the price action. The Federal Reserve is not going to say they have become dovish tomorrow, but if they indicate inflation has shown signs of losing power and suggest interest rates may be kept steady for the next couple of months until they can gauge future data, then the USD/SGD could see a selling cycle erupt. However, there are no guarantees, and betting on the outcome of what the Fed will say beforehand is gambling.
Current Resistance: 1.32940
Current Support: 1.32725
High Target: 1.33210
Low Target: 1.32350
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