Quick Value Changes and Fast Pace Creating Whipsaw

Short-term traders may want to look for more upside, but there is likely a fear that the USD/SGD has gotten too high.

The USD/SGD hit a high quickly early this morning near the 1.36550 vicinity, but in a now rather characteristic fast reversal lower – the currency pair is trading around the 1.36400 mark as of this writing. The USD/SGD continues to incrementally climb, but the path has not been an easy one-way street. Reminding traders because of the USD/SGD volatility, risk management is essential.

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Traders will get no rest over the next day and a half of USD/SGD speculation. The U.S. Federal Reserve will announce its interest rate decision tomorrow. Taking into account last week’s surprising ECB rate increase, there are some analysts worried tomorrow another hike could happen from the U.S central Bank. However it may be possible the Fed says it is going to hold rates in place tomorrow, but tell people it will likely increase in October or November. 

The thinking behind this is that energy costs have gone up and may prove stubborn. This would allow USD/SGD and other Forex traders to note the Fed’s intentions, while also keeping in place a ‘soft promise’ made last month when the Fed hinted rhetorically about wanting to see how economic conditions play out over the next couple of months.

Technical traders of the USD/SGD can see the currency pair has been on an upward path since the middle of July. Yes, there have been peaks and valleys in the trading of the currency pair, but the trend cannot be argued with about direction. While it can be said the USD/SGD has been overbought, the Forex pair is correlating to other major currency pairs teamed against the USD. The ability of the USD/SGD to continue battering upwards against resistance and then fight to sustain value has created a tough speculative landscape for traders trying to time the market.

  • Trading the remainder of the day in the USD/SGD could be choppy as traders wait for tomorrow’s U.S Federal Reserve FOMC Statement.
  • While traders may believe the Fed will sound aggressive, speculators should also note financial institutions have also bet on this perception.
  • Meaning in the aftermath of tomorrow’s FOMC Statement USD/SGD trading could be complicated and fast for several hours in the wake of the rhetoric, this if the Fed has not increased its Federal Funds Rate.

Short-term traders may want to look for more upside, but there is likely a fear that the USD/SGD has gotten too high. However, looking for a sustained reversal lower to take place now would be betting against the trend which has been consistent over the mid-term. One thing is certain, the next day and half of trading in the USD/SGD is going to be volatile.

Current Resistance: 1.36490

Current Support: 1.36320

High Target: 1.36875

Low Target: 1.36025

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