(MENAFN- Daily Forex)

• The USD/SGD has produced slightly higher price action since Thursday of last week, as of this writing on Tuesday morning the currency pair is around the 1.29200 ratio.

The USD/SGD has proven efficient as a barometer in the broad Forex market. The USD/SGD currently is near1.29200, this after falling to a low last Wednesday upon the start of the U.S shutdown and ratios around 1.28630. The currency pair initially saw bearish momentum filter in via USD centric weakness last week, but since last Friday after touching the 1.28800 mark, incremental buying has become stronger.

Intriguingly the USD/SGD did hit a high of around 1.29100 last Thursday before selling off a bit with a reversal, choppy trading has been evident the past handful of days. The higher values in the USD/SGD may be interpreted as cautious behavior from financial institutions. Yesterday's high it should be pointed out was around the 1.29495 vicinity, this before a reversal lower ensued.

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Price action in the USD/SGD has largely danced in step with the other major currencies. The higher price action in the USD/SGD has been clear, but it has not been violent which signals that financial institutions believe equilibrium is being practiced. The U.S government shutdown looks like it will continue, but voices seem to be growing more agitated from the White House as an agreement is sought. For the moment the broad financial markets remain calm.

EURUSD Chart by TradingView

USD/SGD traders still believe the U.S Fed will cut its Federal Funds Rate by another 25 basis points on the 29^th of October. However, even with this knowledge and the temptation to believe the USD/SGD has seen this interest rate factored into value already, the recent upside due to the U.S government shutdown opens a door for speculative consideration. Have financial institutions grown too cautious? Is the strength of the USD the past couple of days suspicious and will a reversal develop?Near-Term Temptations and Caution in the USD/SGD

While there is a temptation to think the upside which has developed in the USD/SGD is overdone, day traders should remain conservative. The desire to sell the USD/SGD feels correct, but cautious signals across the major currencies via the EUR, GBP and JPY for the moment versus the USD are strong.

• The USD/SGD above the 1.29000 looks too high via technical charts with a three month perspective perhaps, but the price of the currency pair has been above this realm in the last week of September and the first week of August.
• Until clarity is delivered for financial institutions it remains likely the USD/SGD will consolidate within these cautiously higher consolidated values.
• Looking for a selloff in the short and near-term may prove to be a speculatively dangerous bet.

Singapore Dollar Short Term Outlook:

Current Resistance: 1.29245

Current Support: 1.29175

High Target: 1.29320

Low Target: 1.29050

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