USD/SGD has once again started moving lower, following a trend driven by softer UST yields and the performance of the USD overnight, according to OCBC’s FX analysts Frances Cheung and Christopher Wong.
Analysis of Mild Bullish Momentum on Daily Chart
After experiencing mild bullish momentum on the daily chart, the trend has started to fade as the RSI fell. The analysts predict a period of consolidation at lower levels, with key support at 1.2953 (recent low) and resistance at 1.3065 (21-DMA) and 1.3160 levels (23.6% fibo retracement of 2024 high to low).
Additionally, the S$NEER is currently estimated to be approximately 1.89% above the model-implied mid, with the model implied spot lower bound at 1.2979. As the S$NEER approaches the upper end of its band, the potential for further downside in USDSGD is limited unless there is a significant downward movement in the broader USD. In such a scenario, the implied lower bound of USD/SGD could shift lower.
Financial Analysis and Impact on Investors
Overall, the USD/SGD pair is expected to continue its downward trend in the near term, influenced by UST yields and the performance of the USD. Investors should pay attention to key support and resistance levels mentioned by the analysts to make informed trading decisions. It is important to monitor broader market movements in the USD to gauge the potential direction of USD/SGD.