USD/SGD Technicals – Familiar Resistance at 1.242 vs 1.24 Support

USD/SGD has seen turbulent times recently due to USD’s volatility. Last week was perhaps one of the most violent week in recent times with BOJ’s stimulus announcement sending USD/JPY sharply higher on Thursday. The spillover resulted in USD/SGD hitting 1.242 but price pulled back on SGD inherent strength. Prices subsequently dipped during early US Trading session on Friday due to NFP Print severely missing expectations. Price dipped below 1.24 as USD weakened, though price subsequently rebounded despite 1.238 being tested twice to no avail.

USD appears to be conflicted where USD/SGD is involved. On one hand, the spillover of USD strength continues due to USD/JPY’s weakening; on the other, USD is strengthening due to safe haven flows especially China, Europe and US economic data have came in weaker than expected last week. Add in SGD’s own indecision due to MAS (Singapore’s Central Bank)’s silence on policy direction, we have a perfect recipe for uncertainty for USD/SGD. This uncertainty is reflected in USD/SGD’s recent higher lows, yet price is also showing lower highs since late March, and that does not give us a strong conviction of trend in either direction.

Currently, price is sitting below the familiar 1.242 resistance, and above current Kumo. Below the Kumo stands 1.24 which will provide yet more support above 1.238. Stochastic readings are pointing lower, and it appears that price may still yet be able to trade lower by straddling along the Senkou Span A before resting on Kumo/1.24 confluence.

Daily Chart

Daily chart appear to be more bullish with price finding support along Senkou Span B (Kumo Bottom). However, price is still trading within February consolidation range, and trading within current Kumo is yet another sign of uncertainty for the time-being. Ultimately, a break below current Kumo and preferably below 1.235 will be able to renew bearish momentum, while bulls may need to find stronger momentum to break above 1.245 and preferably Kumo top to reach 1.25 and retest Mar high once again. Stochastic readings are supportive of a bullish scenario, though that is also negated by current bearish Kumo Twist which is awaiting a bearish breakout confirmation.

With all things considered, traders may wish to be patient and wait for direction from MAS in order to see long sustainable trends. We’ve endured NFP and BOJ announcement being none the wiser, which suggest that a stronger fundamental push may be needed to break current deadlock.

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