The USD/SGD pair fell this morning, following a weaker USD and continued gains in RMB and JPY. OCBC FX strategists Frances Cheung and Christopher Wong provide insights on the latest market movements.
USD Showing Signs of Being Oversold
“Despite the recent dip in USD/RMB, policymakers’ daily fixing of USD/CNY has not followed suit. This could indicate that the RMB’s momentum may not be sustained throughout the day,” the strategists cautioned.
The pair is currently trading around 1.3201 levels, with daily momentum leaning bearish while the RSI indicates oversold conditions. However, there are potential risks of a rebound. Key resistance levels to watch out for include 1.33 (23.6% Fibonacci retracement), 1.3390 (38.2% Fibonacci retracement), and 1.3460 (200-day moving average, 50% Fibonacci).
The S$NEER is currently estimated to be approximately 1.78% above the model-implied mid point, but it has started to move away from its upper boundary.
Analysis and Impact on Your Finances
In simpler terms, the USD/SGD pair has been on a downward trend due to a weakening USD and strong performances from other currencies like RMB and JPY. While this may seem like a good opportunity for investors, it’s important to be cautious of potential rebounds in the USD. Keep an eye on key resistance levels to make informed decisions about your investments.