USD Sells Off Against SGD

[ad_1]

Looking at this market, simply standing on the sidelines and waiting for an opportunity is what I will be doing.

The US dollar got hammered against the Singapore dollar during the trading session on Thursday, but it should be stated that the US dollar fell against almost everything, so it does make a certain amount of sense that we would see it happen here against the Singapore dollar. However, it is also worth noting that we have been in an uptrend for some time and money is more likely than not going to continue to flow toward the US dollar as higher interest rates continue to be a mainstay of the US situation, right along with the US dollar offering “safety.”

Advertisement

We pulled back from the 1.39 Singapore dollar level, falling quite drastically. However, there is still plenty of support underneath, not the least of which will be found in the current trading area of 1.3, and of course, the 50 Day EMA which is at the 1.3725 level. The 1.37 level is also supported as well, so I do think that it is probably only a matter of time before this market turns around. Bonds in America have been oversold, so a little bit of a bounce and a bit of yield softening does make sense, especially if people are starting to price in some type of recession. That will take away the “yield play” when it comes to the greenback. However, the greenback will strengthen because people will be looking to buy those same bonds they have been shunning. In other words, foreigners will convert their currencies into US dollars in that scenario as well.

It is not until we break significantly below the 1.37 level on a daily close that I would start to think about shorting this pair. Furthermore, I would need to see the US dollar shrink against almost everything, not just this market to feel comfortable. If and when that were to happen, then I can make an argument for selling. Until then, I have to look for buying opportunities and follow the overall trend. This is going to be true with a lot of emerging market currencies, although the Singapore dollar is most certainly a lot more stable than many other currencies out there that I can think of. Looking at this, simply standing on the sidelines and waiting for an opportunity is what I will be doing.

USD/SGD chart

[ad_2]

Leave a Reply

Your email address will not be published. Required fields are marked *

Risk warning: Trading Forex (foreign exchange) or CFDs (contracts for difference) on margin carries a high level of risk and may not be suitable for all investors. There is a possibility that you may sustain a loss equal to or greater than your entire investment. Therefore, you should not invest or risk money that you cannot afford to lose. Before using xMetaMarkets services, please acknowledge all of the risks associated with trading.

The content of this website must not be construed as personal advice. We recommend that you seek advice from an independent financial advisor.

The information on this website is not directed to residents of certain jurisdictions such as United States, Canada, Iran, Cuba, France, and some other regions, and is not intended for distribution to, or use by, any person in any countries or jurisdictions where such distribution or use would be contrary to local law or regulation.

© 2018 - 2024 xMetaMarkets.com. All Rights Reserved.