USD/SGD Analysis Today - 28/08: USD/SGD Rebound (Chart)

(MENAFN- Daily Forex) The USD/SGD remains within the depths of long-term lows and financial institutions have begun to show some signs of looking for equilibrium as a slight reversal higher has emerged.

• The ability of the USD/SGD pair to touch a low of nearly 1.29980 early this Monday highlighted the strength of the Singapore Dollar as it challenged levels within the currency pair that had last been seen in November of 2014.
• The USD/SGD has moved slightly higher the past couple of days with standard fluctuations and as of this writing is near the 1.30430 mark.
• Financial institutions which had their dovish Federal Reserve outlooks confirmed on Friday have likely started to look for equilibrium the past couple of days.

The USD/SGD has proven that support levels were vulnerable the past two months, on the 27th of June the currency pair was near the 1.36000 ratio. Having moved towards the 1.30000 mark within a span of two months is remarkable. Speculators who have been bearish have likely profited from the move lower. The question that traders will start to ask is if support levels will start to prove durable.

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Financial institutions have likely priced in their outlooks regarding the U.S Fed's coming rate cuts. This point is likely to be debated, but certainly it appears that USD/SGD traders are counting on more than a 0.25% rate cut from the Fed, the likelihood that another rate cut will come in November was given credence by the rhetoric of Jerome Powell last Friday. The problem for day traders is that the current price of the USD/SGD may need a bit more impetus to go lower, if in fact that is the direction that financial institutions believe should be the direction.

The bounce higher from the 1.30000 is not a surprise; the lack of a violent reversal higher is a sign financial institutions may still believe lower values will be seen in the USD/SGD. However, for the currency pair to move lower from here it may need weaker U.S economic data to be seen tomorrow and into the weeks to come. Choppy trading results for the USD/SGD should be expected in the near-term/SGD Short-Term Wagers and U.S GDP Data

The Gross Domestic Product reports will come from the U.S on Thursday, if growth numbers come in weaker than expected and the Price Index data is below expectations this could play into a bearish scenario for the USD/SGD.

• However, betting on the U.S data before it is published will be like going to a casino. If the data comes in stronger than expected this could propel the USD/SGD slightly higher.
• Traders also have to remember the U.S will celebrate a holiday this coming Monday, which means trading volumes tomorrow may prove rather large before many trading houses disappear for a long weekend.

Singapore Dollar Short Term Outlook:

Current Resistance: 1.30500

Current Support: 1.30390

High Target: 1.30670

Low Target: 1.30180

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