Leading FX strategist Frances Cheung and Christopher Wong from OCBC highlight the recent rebound of USD/SGD after the Non-Farm Payrolls report last Friday. However, the pair stumbled at the 21-day moving average, suggesting a possible resistance level.
Anticipating US CPI Data Release Tonight
Following a broader decline in UST yields and strength in USD and JPY this morning, USD/SGD has eased lower. The Singapore Dollar Nominal Effective Exchange Rate (S$NEER) is currently approximately 1.91% above the model-implied midpoint, with the model suggesting a lower bound at 1.3010. This indicates limited downside potential for USD/SGD in the short term.
However, a further decline in the broader USD could push the implied lower bound of USD/SGD even lower. The pair is currently trading at 1.3025, with daily momentum showing mild bullishness but RSI trending downwards. Market analysts anticipate consolidation near recent lows as investors await the Federal Open Market Committee (FOMC) decision next week.
Key levels to watch for support include 1.30 and 1.2953 (recent low), while resistance levels are at 1.3065 (21-DMA) and 1.3160 (23.6% Fibonacci retracement of the 2024 high to low). The market will closely monitor the release of US Consumer Price Index (CPI) data later this evening for further direction.
Expert Analysis Breakdown:
- USD/SGD rebounded post-NFP but faced resistance at 21-DMA.
- S$NEER is above the model-implied midpoint, limiting downside potential.
- A broader decline in USD could push USD/SGD lower.
- Key support levels at 1.30 and 1.2953, resistance at 1.3065 and 1.3160.
- Market awaits US CPI data release for further market direction.