USD/SGD – Uptrend Intact As SGD Continues To Weaken

USD/SGD – Uptrend Intact As SGD Continues To Weaken

The greenback continues its race against marauding emerging markets currencies and SGD is not sparred even if it is considered as a much stronger financial division from the rest of its Asian counterparts. Since the beginning of 2014, SGD weakened against USD by 0.8%, and this trend does not seem to decline with the uptrend in both the short and long term.

The reason for the upward trajectory is easy to understand - USD remains primed for further growth due to the imminent end of the stimulus plan. The improving US economy and rising US stock prices contribute to promote global institutional funds to reenter in North America again, fueling growth in USD.

Furthermore, Singapore's economic growth is under surveillance now. The housing market is cooling, which deter foreign funds to enter as foreigners account for a high percentage of purchases of private homes on the island state. Recently, it was reported that national non-oil exports (NODX) increased, but in reality, the actual number is much lower due to errors in data collection on trade. After the new revelation, analysts reassess their forecasts, and some felt that NODX for the full year 2013 would have decreased by over 5% y / y. This also means that GDP estimates will be revised downwards, which is certainly not good news for SGD has already been weakened when higher than expected numbers NODX and GDP have been published.

Recent CPI data continues downward economic situation - December CPI rose + 1.5% y / y versus analysts consensus estimate of + 2.0%. This is also at the lowest end of the forecast band by MAS Central Bank, and away from the previous month by more than 2.0%. All these points to a long-term upward trend for USD / SGD in 2014 and possibly in 2015 -. 2016 USD / SGD approach the historical average

Time Table

this morning, lower than many manufacturing HSBC Chinese PMI expected did not SGD favors either, pushing the price further to USD strengthen on haven flows. However, it should be noted that USD / SGD was already trading above 1.28, showing that the price is already bullish to start. Currently the price is trading in a corner of shrinking, and the price has recently bounced off the upper block, which opens up a potential move back towards 1.28 which is confluent with lower corner if the movement transpires in the next 12 hours or more. Stochastic readings agree with a down cycle signal just newly formed, and the fact that the bullish reaction to the weaker than the new CPI was muted suggest that S / T bullish momentum is not as strong as we think.

table Daily

daily chart also shows USD / SGD hit the top corner with stochastic readings currently deep in the overbought region. In addition, the price will face more resistance from the previous swing high seen in August 2013, which limits the potential upside and increased the probability of a bearish decline towards Bottom corner or at least around 1.27 Support whichever comes first.

Nevertheless, it should be noted that all short positions against the trend would be here, and that would present greater risks. This risk increases when one considers that there is no evidence on the daily chart that the bullish momentum is reversing. All we have is a bearish sign downturn can / should be coming soon, and it could happen perhaps 50 pips or even 100 pips. In addition, there is also no guarantee that a bear market will be able to escape completely before long-term bullish momentum returns. As such, traders should exercise extreme caution, especially since the FOMC meeting is just around the corner, and USD is bound to suffer volatility as we move towards the major risk event

links :.
NZD / USD Technicals - Bearish below 0.83 but L / T Followed by unlikely
GBP / USD - Looks threatening resistance at 1.66 Again
AUD / USD - return to Key 0.88 Level

This article is only for general information purposes. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or its subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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