Singapore Dollar: USD weakness needed to extend gains – UOB

A close near 1.2795 followed a decline in USD/SGD as the US Dollar weakened after the US midterm elections, according to United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann. They expect a modest downward bias in intraday trading, although any losses are likely to stop short of 1.2755. Looking one to three weeks ahead, a close below 1.2775 would clear the path towards major support at 1.2755.

Downward pressure persists as key support holds

"24-HOUR VIEW: Two days ago, USD edged to a high of 1.2817. Yesterday, we indicated that “the increase in upward momentum is insufficient to indicate a continued advance,” and we were of the view that USD “is likely to range-trade between 1.2790 and 1.2820.” Instead of range-trading, USD declined to 1.2775 before rebounding. USD closed at 1.2795 (-0.16%), but it traded on a soft note in the early Asian trade today. There has been a tentative increase in downward momentum, and the bias for USD today is tilted to the downside. Based on the prevailing momentum, any decline is unlikely to reach 1.2755. There is a minor support at 1.2760. Resistance is at 1.2800."

"1-3 WEEKS VIEW: We have been holding the same view since last Tuesday (27 Oct, spot at 1.2810), when we highlighted that USD “is likely to trade between 1.2775 and 1.2835.” Yesterday, USD tested the lower boundary of our expected range with a low of 1.2775. The tentative increase in downward momentum suggests USD could edge below 1.2775. If USD closes below this level, it could then likely challenge the major support at 1.2755. To sustain the momentum, USD must hold below 1.2815."

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