Singapore Dollar: Further weakness possible against US Dollar – UOB

FXStreet Insights Team FXStreet

UOB strategists Quek Ser Leang and Lee Sue Ann note that USD/SGD rebounded to 1.2810 before closing at 1.2797. While upward momentum is rebuilding, it remains insufficient to signal a sustained advance. The pair could edge above 1.2810, but the major resistance at 1.2835 is unlikely to be reached. A break below 1.2765 would point to renewed range-trading.

Dollar firm but capped below 1.2835

"24-HOUR VIEW: USD eased to a low of 1.2769 two days ago. When it was at 1.2780 yesterday, we highlighted that “the slight increase in downward momentum suggests USD could continue to ease today, but any decline should stay within a 1.2765/1.2795 range.” However, USD rebounded from 1.2775 to 1.2810 and then closed 0.10% higher at 1.2797. The increase in upward momentum is insufficient to suggest a sustained rise. However, there is a chance for USD to edge above 1.2810. We do not expect the major resistance at 1.2835 to come into view. Support is at 1.2785, followed by 1.2775."

"1-3 WEEKS VIEW: Last Friday (02 Oct, spot at 1.2800), we highlighted that “momentum is building again, and USD is likely to rise toward 1.2835.” After USD retreated to 1.2769, we highlighted yesterday (07 Oct, spot at 1.2780) that USD “has likely entered a range-trading phase between 1.2740 and 1.2810.” We did not expect USD to test the top of our expected range so soon as it rose to a high of 1.2810 during the NY session. While upward momentum is building again, it is weaker than before, and USD is unlikely to reach 1.2835. On the downside, a breach of 1.2765 (‘strong support’ level) would indicate a period of range-trading."

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