USD/SGD- Weekly Analysis for Singapore Binary Options
This is a big week for the US Dollar as we have the two most impactful US events lined up on the calendar, the FOMC meeting today (Wednesday) and the Non-Farm Payrolls on Friday.
No changes are expected from the Fed today after the December rate hike. Currently, there are no changes in market expectation for future Fed hikes with two more rate hikes priced in for this year. Good news for the FOMC committee is that inflation seems to be on the rise and with the unemployment rate at 4.7% they can freely go ahead and raise rates again. The latest CPI report printed a 2.1% increase in prices vs. 1.7% expected, giving a bullish boost to the dollar.
Regarding Non – Farm payrolls, the last report was slightly worse than expected with only 156k new jobs vs the 175k expected. However, a slowdown in job growth is to be expected as the economy nears full employment so a number around 150k on Friday should not cause a large sell-off in the Dollar (markets expect a number of 170k).
However, the Fed could easily be overshadowed by the new President Trump especially after his announcement that he wants a weaker Dollar in the future. If he back this statement by actions we could see a reversal in the bullish Dollar trend that now lasts for several years already.
From Singapore binary options brokers, the manufacturing PMI will be released on Thursday expected to show a reading of 50.6, slightly higher than the 50.2 reading in January.
USDSGD is still in consolidation mode. We will have to wait and see whether or not this retracement will turn into a full-blown reversal. For now, the strong support zone at around 1.4070 has already once held the price from falling lower. Depending on today’s close, we may even get a bullish reversal candlestick pattern right at this level.
As it was indicated in our analysis a few weeks ago, 1.4070 is a strong Fibonacci support area aided by a former resistance level now turned into support (blue area on the chart). If the price breaks through this zone to the downside then the probabilities will be higher for this retracement to turn into a complete reversal.
USDSGD Daily chart – The big question now – Will support hold?
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