USD/SGD traders have been treated to a strong reversal higher the past handful of days which is correlating to the broad Forex market.

After traversing long-term lows late last week, the USD/SGD has reversed higher and sustained its near-term values as it correlates to the broad Forex market which is demonstrating uncertainty regarding U.S Federal Reserve policy. The USD/SGD was challenging values in the 1.27750 vicinity last Thursday and now finds itself near the 1.29515 ratio with fast price action.

The USD/SGD had been testing lows around the 1.27200 area in early July and late last week was showing optimistic selling which brought the 1.27400 mark into view. But Thursday’s trading last week suddenly saw a shift in Forex as financial institutions globally started to buy the USD in force. The buying built into a frenzy yesterday when Fed Chairman Jerome Powell confirmed he has no intention of cutting U.S interest rates anytime soon unless he feels he is justified.

Battle of Wills and Short and Mid-Term Dynamics

The highs in the USD/SGD were last touched in mid and late May of this year. The USD/SGD has been one of more bearish currency pairs globally for a handful of months. Tariff considerations did effect the Singapore Dollar a bit during the early part of this year, but the realization that Singapore was well-positioned to handle the internation tariff intrigue made financial institutions more comfortable.

However, interest rate considerations are hitting the USD/SGD now. Yesterday’s tough stance by Jerome Powell may have surprised financial institutions who believed he would at a minimum off the chance of a rate cut in September. While he says remains open to all considerations, behavioral sentiment clearly is interpreting Powell’s rhetoric as hawkish regarding interest rates until the Fed feels comfortable about tariff ramifications. The USD/SGD went from a rathe tame 1.28000 to 1.29700 thereabouts with considerable price velocity upwards yesterday.

Near-Term Speculation in the USD/SGD

This morning’s price action in the USD/SGD continues to see the currency pair maintain its short-term highs. The 1.29500 mark looks to be important and may serve as a psychological ratio for financial institutions. If the level is sustained with higher values, this will indicate more nervousness and the belief the USD/SGD can move higher near-term.

• If the 1.29300 level starts to see action and is sustained, this might indicate some financial institutions believe the currency pair is overbought.
• Today and tomorrow tariff news from the White House will be heard. Also tomorrow the U.S jobs numbers will be published.
• Traders in the near-term need to understand financial institutions are nervous.
• Perhaps the buying in the USD/SGD has been overdone, but the move upwards should be given respect.

Singapore Dollar Short Term Outlook:

Current Resistance: 1.29525

Current Support: 1.27440

High Target: 1.29630

Low Target: 1.29150

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