Singapore Dollar: Gains risk watched below 1.2790 against US Dollar – UOB

FXStreet Insights Team FXStreet

United Overseas Bank’s (UOB) Quek Ser Leang notes USD/SGD’s recent downside bias has faded after a dip to 1.2790 and recovery to 1.2827. In the near term, the pair is expected to range between 1.2805 and 1.2845, while on a 1–3 week horizon, further declines require a clear break below 1.2790, with 1.2765 the next level to watch.

Downside risk hinges on 1.2790

"24-HOUR VIEW: The following are excerpts from our update yesterday: “While the bias remains tilted to the downside today, given that there is no clear increase in downward momentum, any decline may not break the significant support at 1.2790. On the upside, a breach of 1.2845 would indicate that the downside bias has faded.” We were not wrong, as USD dipped to 1.2790 before recovering to close little changed at 1.2827 (+0.05%). The downward bias has faded with the recovery. Today, we expect USD to trade in a range, most likely between 1.2805 and 1.2845. "

"1-3 WEEKS VIEW: We continue to hold the same view as yesterday (03 Aug, spot at 1.2815). As highlighted, while the recent strong momentum “suggests further downside risk, USD must break and hold below the significant support at 1.2790 before further declines are likely.” The risk of USD breaking clearly below 1.2790 will remain intact as long as USD holds below 1.2875 (no change in ‘strong resistance’ level). Looking ahead, the next level to watch below 1.2790 is 1.2765."

(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

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