Singapore Dollar: Range consolidation after sharp decline against US Dollar – UOB
United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that USD/SGD surged to 1.2754 after previously expecting a tighter range, with the Singapore Dollar (SGD) Nominal Effective Exchange Rate (S$NEER) still above its mid-point. They now see the pair as neutral in the 1.2705–1.2780 band in the coming days, with intraday gains likely capped between 1.2725 and 1.2765 and major resistance at 1.2780.
Dollar-Singapore range after spike
"24-HOUR VIEW: Last Friday, we indicated that USD “could trade between 1.2695 and 1.2725.” However, during the NY session, USD jumped to 1.2754. While the rapid rise has scope to extend, overbought conditions suggest any advance could be contained within a range of 1.2725/1.2765. Even if USD were to break above 1.2765, the major resistance at 1.2780 is unlikely to come into view."
"1-3 WEEKS VIEW: After holding a negative USD stance since early this month, we highlighted last Friday (28 Aug, spot at 1.2710) that “downward momentum is fading, and a break above 1.2730 (‘strong resistance’ level) would indicate that USD is likely to continue trading in a range.” USD subsequently broke above 1.2730 and soared to 1.2754. We are revising our view from negative to neutral, and from here, we expect USD to trade in a range between 1.2705 and 1.2780."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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