Singapore Dollar: Upside risk stays intact against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann maintain a cautious stance on USD/SGD after Friday’s drop to 1.2682 and close near 1.2700. In the very near term, they expect the pair to stay confined between 1.2680 and 1.2715, while over the coming weeks the bias remains lower toward 1.2670, provided resistance at 1.2750 caps rebounds.

Downside bias with capped rebounds

“24-HOUR VIEW: When USD was at 1.2715 last Friday, we stated that “the current price movements are likely part of a consolidation phase between 1.2700 and 1.2730.” However, instead of consolidating, USD declined to a low of 1.2682. USD recovered from the low to close 0.19% lower at 1.2699. Despite declining, there has been no significant increase in downward momentum, and instead of continuing to decline today, USD is more likely to trade in a range of 1.2680/1.2715.”

“1-3 WEEKS VIEW: We have been holding a negative USD view since early this month (see annotations in the chart below). In our most recent narrative from last Thursday (20 Aug, spot at 1.2710), we highlighted that “while the risk for USD remains on the downside, oversold conditions could slow the pace of any further decline.” We also highlighted that “the next level to monitor is 1.2670.” We will continue to hold the same view as long as 1.2750 (‘strong resistance’ level previously at 1.2760) is not breached.”

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)