A Decline within a Nervous Range as Impetus Awaits

The USD/SGD has started to show the ability to create downwards movement in the past handful of days, but its value range remains choppy.

The USD/SGD is near the 1.36550 ratio as of this writing, this after challenging a low of nearly 1.36300 early this morning. Last week at this time the USD/SGD was trading near highs it had last experienced since late November of 2022. As of this morning the USD/SGD is within sight of important technical support that was essentially created last month. If the USD/SGD can sustain its current near-term bearish trend, speculators may believe the 1.36000 level is a potential target.

However, before USD/SGD traders get overly ambitious they should note that tomorrow and Thursday pose important days for financial institutions and Forex. The U.S Federal Reserve will release its FOMC Meeting Minutes on Wednesday. While analysts widely expect the Fed to hike the Federal Funds Rate in November once again, the question for all speculators is if the U.S central bank will then begin to change its monetary policy stance.

The ability of the USD/SGD to not sustain its upwards momentum above the 1.37000 for a solid duration is a point of interest. Perhaps financial institutions believe the currency pair was overbought within the higher territory. Intriguingly, the downwards trajectory of the USD/SGD began in earnest on last Wednesday. Yes, there were volatile reversals higher that did occur in the following three days, but the USD/SGD started to show signs of a downwards trend slightly before many other major currency pairs.

Tomorrow the U.S will release Producer Price Index inflation data and on Thursday the CPI numbers will be reported. These two reports will play into the Forex and broad financial markets. If the inflation numbers come in less than expected this could help sustain a selloff of the USD/SGD. However, if the inflation numbers come in stronger than anticipated this could create another flurry of USD/SGD buying. Traders entering positions before the conclusion of these two publications will be wagering on outcomes they do not know.

• Short-term support near the 1.36470 level should be watched. If this ratio is proven vulnerable it could create a test of lower values for the USD/SGD.
• However, the next 24 hours of trading in the USD/SGD will likely react to current behavioral sentiment which is rather fragile, as it awaits the impetus of the two U.S inflation reports and the FOMC Meeting Minutes.
• Meaning the near-term for the USD/SGD could produce rather choppy conditions, thus speculators are advised to use solid risk management while trying to take advantage of potentially fast-moving price changes.

Current Resistance: 1.36665

Current Support: 1.36470

High Target: 1.36850

Low Target: 1.36325

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