The noisy behavior more likely than not will continue throughout the rest of summer.

The US dollar dropped a bit on Friday as we continue to consolidate overall. The 1.39 level has offered a bit of resistance, and the 1.3850 level has offered support. This is a market that is trying to break out of the higher levels, and it will be interesting to see whether or not the greenback can continue to go higher. Ultimately, this is a market that will continue to find buyers on dips from everything I see, but we are starting to see the US dollar soften a bit from the extreme overbought condition that it had been in overall.

The 50-day EMA sits just below the 1.38 handle and is rising. I think this continues to be an area that people will be paying close attention to and could offer a certain amount of dynamic support. This is an area that has attracted a lot of attention a couple of times, it looks like the 1.40 level above is a massive barrier that is going to take some time to get above. If we can get above the 1.40 handle, then it’s likely that the market could go much higher. We had pulled back to the 61.8% and then bounced again. Because of this, one would have to think that eventually, we will continue to go higher, and the interest rate situation in America certainly does suggest that the US dollar should continue to rally.

Having said that, if the US dollar were to break down below the 1.3750 level, then it could change things, but right now it seems more likely than not we will have plenty of buyers on dips. The market has been noisy over the last couple of weeks, but that’s just a microcosm of the entire Forex world. I do believe that eventually we will go higher, but the noise is going to be quite drastic. Because of this, you will need to be cautious with your position sizing, recognizing that we will get the occasional irruption in both directions, and also should pay close attention to the 10-year note, because the interest rates in America will have a major influence on the greenback itself. The noisy behavior more likely than not will continue throughout the rest of summer.

Be prepared for continued noisy behavior.

The US dollar initially tried to rally during the trading session on Tuesday to reach the 1.38 handle against the Singapore dollar. However, the market has pulled back rather significantly during the trading session, as interest rates in the United States initially jumped above 3%, and then fell rather drastically. This is a market that is very volatile in general, and the USD/SGD is going to behave just as many of the other markets around the world.

The US dollar has enjoyed a lot of strength as of late, but the Singapore dollar has been even stronger. It will be interesting to see this plays out but currently, it appears that a lot of money in Asia is running toward Singapore for safety. The Singapore dollar can be thought of like the “Swiss franc of Asia”, so therefore it does behave quite a bit like the franc.

I believe it this point it’s likely that we will continue to see a lot of noisy behavior overall, and therefore I think we are going to reenter the previous consolidation area, between 1.3666 and 1.3766. The 50 Day EMA sits right in the middle of that, and the 61.8% Fibonacci retracement level is also in the midst of all of this noise as well.

Keep in mind this pair typically does not move rapidly, so it’s not a huge surprise at all to see it chop around. The selloff had been rather brutal previously, but if the US dollar continues to see a lot of upward momentum and other currency pairs, one would think that it is only a matter of time before we see it here as well.

If we were to break down below the 1.3650 level, then the USD/SGD pair will test the 200 Day EMA, which is currently just above the 1.36 level. If the market was to break down below there, then it signifies a longer-term downtrend could be forming. If that’s going to be the case, then you need to look around the world to see how the greenback is behaving, because you may see it sell off against everything else as well. It’s worth noting that this pair does tend to “buck the trend” when it comes to the greenback at times, so pay attention.

Keep in mind that this pair is slow-moving at times, so a little bit of patience will probably go a long way in this market.

The US dollar went back and forth on Monday as we are hanging about the area just above the 1.39 level. Ultimately, this is a market that I do think will go higher but the 1.40 level above is offering a little bit of psychological resistance. The market has been very bullish for quite some time, and it certainly looks as if it is only a matter of time before value hunters come back into this market and try to pick this market up.

If we were to break down below the 1.39 level, then we could go looking at the 1.38 handle. Ultimately, this is a market that continues to favor the greenback as most markets do, especially with Asia being a bit of a mess right now due to the supply chain issues out there. The Singaporean economy itself is levered to a lot of Asian business activity as it is essentially a banking hub for that part of the world. Having said that, anything that is not labeled “USD” is going to continue to look a little bit soft in this type of environment.

If we did break down below the 1.38 level, then it is possible we could go down to the 1.37 level, an area that had previously been resistant, and also where we have the 50-day EMA crossing at the moment. This is a situation where there are plenty of reasons to believe that the buyers are going to get involved. If we break it down below the 1.37 handle, it is possible that the market could break down, but that would take a Herculean shift in attitude. The Federal Reserve is likely to continue on its hawkish behavior, so it makes sense that the US dollar would strengthen. The market will continue to see a lot of volatility, and that is going to be the case in almost everything, but as long as we have a lot of “risk-off behavior” out there, the US dollar is typically favored over the Singaporean dollar. Keep in mind that this pair is slow-moving at times, so a little bit of patience will probably go a long way in this market. We have been in an uptrend for quite a while, but as you can see, a lot of candlesticks are small in range.

Dips will more than likely offer plenty of buying opportunities as we go forward.

The US dollar rallied again on Monday as we are threatening the 1.39 SGD level. Ultimately, the Singapore dollar continues to get beaten up by the US dollar as we have seen over the last couple of weeks, as signs of a serious slowdown in Asia continue to weigh upon all currencies. After all, China is essentially locked down, while the Japanese are doing everything they can to devalue their own currency. In this scenario, Singapore cannot help but see a little bit of a “knock-on effect” at this point.

All of that being said, we have not broken to a fresh, new high, which was right at the 1.39 level. While we could do so, it makes quite a bit of sense that we would hear a lot of noise in this general vicinity, perhaps chopping around to build up enough inertia to continue going higher. The bond markets are worth paying attention to because as long as the yields in America continue to spike higher, it does make sense that we would see the US dollar strengthen. Furthermore, as long as there is a lot of risk aversion out there, it is likely that we would see a lot of running away from anything not called the “US dollar.” However, it is worth noting that the Singapore dollar is considered to be a relatively safe currency.

Underneath, if we were to break down significantly, we could go looking to the 1.37 level, where we had broken out from previously. In general, this is a market that I think continues to see a lot of volatility but that is going to be the case with all currencies right now. On a break above the 1.39 handle, then the USD/SGD market is likely to go looking to reach the 1.40 level next. On the other hand, if we were to fall and break below the 1.37 handle, then it is likely that we could try to re-enter the previous consolidation area, perhaps even allowing the market to fall to the 1.35 handle. That being said, it is very unlikely to see the US dollar lose that much ground in this type of economic environment. With this, dips will more than likely offer plenty of buying opportunities as we go forward.