USD/SGD Continues Upward Trend for 5 Consecutive Sessions
The USD/SGD pair has been on a steady incline for the past five trading sessions, reaching levels of 1.3041 most recently. According to OCBC’s FX analysts Frances Cheung and Christopher Wong, this upward momentum is driven by various factors in the market.
Factors Driving the USD/SGD Pair
- Hotter US payrolls data acting as a trigger for the recent movement
- Daily momentum showing a bullish trend
- RSI indicating a moderate rise near overbought conditions
- Key resistance levels at 1.3060 (50 DMA) and 1.31 (38.2% fibo retracement of Jul high to Sep low)
- Support levels at 1.2980 (23.6% fibo) and 1.2940 (21 DMA)
MAS Policy Decision and Potential Implications
With the Monetary Authority of Singapore (MAS) set to announce its policy decision on 14th October, market analysts are closely watching for any surprises. While the consensus is for MAS to maintain the status quo, there is a possibility of an earlier easing based on the following considerations:
Key Points to Consider
- S$NEER estimated to be ~1.79% above model-implied mid
- Forward-looking approach of MAS to monetary policy making
- Core CPI’s disinflation journey remains intact
- Slight bump-up in core CPI in August
These factors suggest that while the prevailing appreciating path of the S$NEER policy band may still be deemed appropriate, there is a chance that MAS could deviate from expectations and opt for an earlier easing stance.
Analysis and Implications for Investors
For investors and traders in the forex market, the potential for an earlier easing by MAS could have significant implications on their strategies and positions. It is essential to monitor key support and resistance levels in the USD/SGD pair and stay informed about any policy changes announced by MAS.
Overall, the current market dynamics suggest a cautious approach, with the possibility of unexpected shifts in monetary policy decisions. Traders should remain vigilant and adapt their strategies accordingly to navigate potential changes in the forex market.