Singapore Dollar: Range-bound bias holds against US Dollar – UOB

FXStreet Insights Team FXStreet

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that USD/SGD extended higher than expected, with the pair touching 1.2814 instead of staying in the prior intraday range. Short-term momentum suggests scope for a test above 1.2820, though gains are seen as limited. Over the coming weeks, UOB expects USD/SGD to remain confined between 1.2775 and 1.2835, with upside risk only extending if 1.2871 breaks.

Upside capped within tight range

"24-HOUR VIEW: Yesterday, we indicated that USD “is likely to trade in a range between 1.2765 and 1.2790.” Our view of range-trading was incorrect, as USD rose to a high of 1.2814. The advance has scope to rise above 1.2820, but based on the prevailing momentum, a continued rise above this level appears unlikely. The next resistance at 1.2835 is also unlikely to come under threat. Support is at 1.2800, followed by 1.2790."

"1-3 WEEKS VIEW: We turned negative on USD early last week. Yesterday (26 Oct, spot at 1.2780), we indicated the following: “Since then, USD has traded mostly in a range, but while downward momentum is starting to slow, there remains a chance for USD to test 1.2750. Based on the prevailing momentum, a continued decline below this level is unlikely. On the upside, a clear break above 1.2795 (‘strong resistance’ level) would mean that USD could continue to range-trade for a period.” USD subsequently broke above 1.2795, rising to a high of 1.2814. The increase in upward momentum is not sufficient to indicate a sustained rise. From here, we expect USD to trade in a range between 1.2775 and 1.2835."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

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FXStreet Insights Team

FXStreet

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