USDSGD Weekly outlook for Singapore Dollar –

USDSGD Outlook – Binary Options

Introduction

The best Singapore brokers have been trading in a bearish flag channel for some weeks looking at the weekly chart. If the Singapore dollar will continue to gain against the US dollar when the price of the pair can close below the channel for the bearish trend to continue. 

As investors are bracing up for the hike on US interest rates which may lead to capital outflow from Asia, Singapore’s dollar showed strength as their central bank tightened its policy as inflation risk rose.

Singapore Fundamentals

The Singapore dollar gained over 0.2% against other currencies as more central banks within the emerging economy and the developed economy is beginning to tighten their monetary policy or preparing for the shift of trends in the financial market. 

During the collapse in oil prices globally in 2015, the Monetary Authority of Singapore eased its policy, can the (MAS) ease the policy or tighten it as the COVID-19 continues to breed new variants within the country. The Monetary Authority of Singapore may tighten up its policy because of the domestic outbreak of the Omicron. 

The Core inflation rate measured by the central rose to 2.1% as of December on a year-on-year basis while Reuters poll of economists forecasted the rate at a 1.7% increase. Singapore’s central bank may tighten the rate further by April when the next policy will be reviewed, however, in October last year, the central bank tightened its monetary policy after a long time. As a result 

US Fundamentals

ISM Services PMI

The report focuses on the survey carried out among 300 purchasing managers who rated the relative level of business conditions in terms of employment, new orders, prices, and other factors on economic activities. A figure above 50.0 shows an expansion in the industry while a figure below indicates a contraction.

The survey excludes the manufacturing industry while its diffusion index is on purchasing managers. If the report from Non-manufacturing PMI is greater than the forecast it is good for the currency.

The Forecast is 59.5 while previous data was 62.0

USDSGD Long term Price Analysis

Monthly Outlook: Down Swing Slowing within Significant Support Area

USDSGD monthly chart - Feb 4 2022

 

Monthly Resistance 1.46689, 1.39366, 1.37498.

Monthly Supports 1.31570, 1.31206, 1.34122.

The USDSGD pair has been ranging on the monthly chart for some months as the price of the pair could not breakout above the 1.37498 zones and close below the 1.34122 support zones. Singapore brokers who are bearish on the USDSGD pair are still holding on to their gains against the US dollar from the supply zone of 02 March 2020. 

If the price can close below the support level of 1.31570, the bearish trend will continue on the monthly time frame. However, if the current zone of support is not breached, we may see the US dollar make some gains against the Singapore dollar.

Weekly 

 

Weekly Resistance Levels: 1.37491, 1.42885.

Weekly Support Levels: 1.34190, 1.31467.

The Singapore brokers are holding on to their position on the USDSGD currency pair as we can see that the weekly time frame has formed a bearish flag pattern. If the pattern is to play out, we may begin to see the bears breaking out of the channel to retest the support zone of 1.31467 for a breakout below move or we get another rejection of price. However, the Singapore dollar continues to make gains recently as the central bank of Singapore tightens monetary policy.

It is not certain if it is the beginning of a reversal pattern since the price of the USDSGD pair has not gone lower than the 1.33762 zones for some weeks. If the zone continues to hold the long position traders will be looking for an opportunity to trade long positions.

Daily Outlook: Bearish

Daily Resistance Levels: 1.36149, 1.37490.

Daily Support Levels: 1.33801.

On the daily chart, the USDSGD pair is forming a head and shoulder pattern which will trigger a bearish trend when the price closes below the neckline of 1.33801 zones. Signs of economic recovery are reported by the MAS analysts as a result of trade-related and service sectors because the COVID-19 restrictions are eased in some domestic-oriented and travel-related sectors. 

The Singapore authorities have vaccinated about 85% of its population against the COVID-19 while about 55% have already received the booster shots.

Bullish Scenario:

 The scenario is slim at the moment because of recent factors in favor of the Singapore brokers who are bearish since the surprising move of the Singapore central bank strength the currency. The Bulls will need to establish support before the trend can favor them.

Bearish Scenario:

The trend remains bearish as the price of the USDSGD pair keeps pushing lower and lower on the daily chart. It is forming a descending triangle pattern. If the price closes below the support zone of 1.34267, it will take the price lower in the coming days.

Conclusion

The Central banks globally are working on their monetary policies by tightening the rate and the price pressure cannot be ignored by these banks, steps are taken to protect the recovering economy and its stability.

The price is around a psychological zone and the outcome will shift the bias of the Singapore broker either for the continuation of the bearish trend or we shall see a reversal of the trend. 

I'm based in London ( England, UK )
I've been a professional trader for over 5 years.
Currently I work as forex analyst for different investment companies.

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