USD/SGD – Greenback Rally Continues Ahead of US Nonfarm Payrolls

USD/SGD has posted slight gains on Friday, as the pair continues its upward trend for a third straight day. In the European session, the pair is trading just shy of the 1.41 line. The markets are keeping a close watch on US employment data, as Nonfarm Payrolls and the unemployment rate will be released later on Friday.

The markets are anxiously awaiting US Nonfarm Payrolls, which will be released on Friday. NFP is expected to rise sharply to 181 thousand, so the dollar could be a big winner as we wrap up the trading week. However, the markets haven’t forgotten the dismal NFP report in September, which came in at 142 thousand, well short of the estimate of 201 thousand. Will the forecast for the October release be more accurate? Aside from employment numbers acting as an important gauge of the US economy, these releases have added significance, since strong job numbers will increase the likelihood of a rate hike in December. Conversely, a poor performance will damper expectations of a move by the Fed before 2016. Traders should be prepared for volatility after the Nonfarm Payrolls release.

On Thursday, US unemployment claims disappointed, as the key indicator jumped to 276 thousand, way above the forecast of 263 thousand. This marked a 5-week high. Still, recent jobless claim releases point to close to full employment in the US, and the four-week average of jobless claims, which is less volatile than the weekly release, remains at its lowest level since December 1973. The unemployment rate stands at just 5.1%, and is expected to nudge lower to an even 5.0%.

It was a quiet week out of Singapore, with no economic releases. Next week, Singapore releases Retail Sales and Foreign Reserves, and China, whose key releases can have a strong effect on the Singapore dollar, will publish CPI and Industrial Production. This means that traders will have some cues to work with besides US releases next week, and this could translate into stronger volatility from SGD/USD.

USD/SGD Fundamentals

Friday (Nov. 6)

• 13:30 US Average Hourly Earnings. Estimate 0.2%
• 13:30 US Nonfarm Employment Charge. Estimate 181K
• 13:30 US Unemployment Rate. Estimate 5.0%
• 20:00 US Consumer Credit. Estimate 17.6B
• 21:15 FOMC Member Lael Brainard Speaks

*Key releases are highlighted in bold

* All times are GMT

USD/SGD for Friday, November 6, 2015

USD/SGD November 6 at 11:55 GMT

USD/SGD 140.94 H: 140.97 L: 140.54

USD/SGD Technical

• USD/SGD was flat in the Asian session and has posted modest gains in the European session.
• 1.4073 has switched to a support role following gains by the pair. It is a weak line and could see further action during the day.
• 1.4139 was an immediate resistance line.
• Current range: 1.4073 to 1.4139

Further levels in both directions:

• Below: 1.4073, 1.3900, 1.3823 and 1.3746
• Above: 1.4139, 1.4248 and 1.4300

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.