Another Reaction Higher as Fundamentals Crash Party

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The USD/SGD has seen another strong move higher this morning, this follows Friday’s climb upwards also as financial houses continue to react to changing economic outlooks.

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The USD/SGD currency pair has seen another strong burst of buying early this morning as the currency pair is now situated around the 1.43425 mark as of this writing. This past Wednesday and Thursday saw the USD/SGD trading near lows around the 1.42000 a couple of times. The low water ratios seen last week now appear to be wishful thinking via financial houses, that the U.S Federal Reserve was going to start becoming more dovish, meaning they would not raise their interest rates aggressively in the coming month of November.

However the illusion of a more tranquil U.S Federal Reserve was essentially killed off on Thursday and Friday of last week. This as Fed officials delivered hawkish rhetoric saying interest rate hikes need to be anticipated, followed by better than expected jobs data on Friday, the USD/SGD returned to its bullish trend with strength.

Technical Traders should look at the Results from this September

Only two weeks ago on the 29^th of September the USD/SGD was trading near the 1.44900 level. On the 13^th of September the USD/SGD went to a low of nearly 1.39425, until the bullish trend then re-emerged. The Forex pair is now testing levels last seen during the height of coronavirus fears. However, the USD/SGD has seen much loftier heights.

The USD/SGD has emerged as one of the more interesting currency pairs of the last thirty years. Singapore as a nation has made vast strides and become a central financial hub of Asia, insuring the Singapore dollar is strong. Historically via long term technical charts the USD/SGD has been within a rather interesting bearish trend. But this is not the reality on the ground right now, and technical traders who believe the USD/SGD is overbought due to these considerations may find difficult trading ahead.

Resistance near the 1.43800 to 1.43900 levels should be monitored. If this level above is challenged speculators may want to wager the 1.44000 mark will be seen again near term.
Nervous global markets and the ‘acceptance’ the U.S Fed is not done pursuing its hawkish interest rate policy means the USD/SGD needs to find equilibrium again.

After Falling to Lows on Wishful Thinking the USD/SGD now must find Equilibrium

The USD/SGD may continue to provide volatile trading in the near term as financial houses come to the conclusion they had the wrong fundamental perspective regarding the U.S Federal Reserve. Speculators who want to wager on further upside developing in the near term cannot be faulted. The USD/SGD will certainly not provide a one way avenue upwards, reversals lower will be demonstrated. Solid risk management is essential. However, the USD/SGD may find that its perceived equilibrium remains at a higher value compared to what it is now traversing and a retest of the 1.43550 to 1.43700 ratios may be targeted in the short term.