The US Dollar strengthened significantly post the US Election and that in turn has provided a huge upward boost to the USDSGD pair as well. The pair rose from 1.3840 on November 9 to a high of 1.4185 on November 16.
Trump’s win also means that the US Federal Reserve will get more hawkish and markets across the globe have already started to price in higher inflation. This is all bullish for the Dollar and in general, most of the policies that Trump advocated throughout his campaign are Dollar favorable. Therefore, Singapore binary options traders can expect a broadly strong US Dollar in the following months, and hence higher exchange rate of the USDSGD pair.
In the meantime, Singapore has recorded a lower GDP print than forecasted adding selling pressure to the Singapore Dollar.
On the technical side of things, the uptrend is very strong and as we can see from the chart, the pair even broke above the upper border of the channel. This potentially means that the uptrend is overextended and the RSI confirms this by showing an overbought reading.
However, those indications don’t necessarily mean that the pair will immediately reverse considering that the current momentum of the uptrend is very strong and there is no resistance to the upside until 1.4430.
Lastly, the broad strength of the US Dollar at the moment should be able to take USDSGD to at least 1.44 and any downside correction in the near future is likely to be shallow and short-lived, probably contained withing the bullish channel (dotted lines on the chart).
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