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The USD/SGD is battling near highs as the currency pair continues to test a resistance level above that is within sight of values demonstrated in March.
Nervous behavioral sentiment continues in the USD/SGD and the broad Forex market. The USD/SGD is near the 1.35500 ratio which is challenging highs seen nearly three times in the past week. Day traders speculating on upwards momentum to continue in the short-term cannot be blamed, technically the push back after the 1.35550 area has been approached the past handful of days are intriguing.
Yesterday’s better than expected consumer confidence numbers from the U.S may not seem like a significant factor for the USD/SGD, but fundamentally it reasserts the U.S economy is somehow remaining optimistic. This doesn’t mean U.S consumers will remain optimistic, but it shows they are spending money which will certainly not help inflation stop.
The U.S Federal Reserve’s impact last week via its rather hawkish sounding FOMC Meeting Minutes, and stated concerns regarding inflation have helped the USD/SGD climb and remain near important resistance. Traders have more concerns ahead, and on Friday the U.S will publish employment numbers, which will include the Average Hourly Earnings. If wages in the U.S show an increase, this would put the U.S Fed in a position in which they may have to remain more aggressive than they had hoped.
- The USD/SGD has important resistance near the 1.35550 level. If this is penetrated higher the currency pair may see additional buying ignite.
- Volatility should be expected as the USD/SGD tests highs which have been pushed back recently.
- The consideration that the currency pair remains within sight of these highs could mean more tests upwards could be coming, particularly as financial institutions remain nervous about outlook.
- If inflation numbers this coming Friday show an upwards Average Hourly Earnings outcome, this could cause more nervous buying in the USD/SGD near-term.
Traders who have been able to readjust their thinking and pursue the upwards momentum of the USD/SGD the past few week of trading have hopefully found profitable results. While it appears an interest rate hike from the U.S Federal Reserve has likely been digested into the USD/SGD now, the recent test of highs suggests that more challenges may be ahead. Caution is advised in the near-term, particularly with the Non-Farm Employment Change data coming this Friday.
Current Resistance: 1.35550
Current Support: 1.35425
High Target: 1.35700
Low Target: 1.35025
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