USD/SGD: Short-term challenges amid overall rebound – UOB
USD/SGD Outlook: Short-Term Weakness Amid Potential Second Quarter Recovery
According to Quek Ser Leang from United Overseas Bank, the USD/SGD pair is currently experiencing downward pressure, with immediate support levels identified at 1.2760. Despite this, the broader technical indicators suggest a possible rebound during the second quarter. Key support zones are found at 1.2660 and 1.2586, while resistance remains strong near the 55-week EMA at 1.2940.
Recovery Signs Tempered by Near-Term Risks
In early March, USD/SGD moved above a minor descending weekly trendline around 1.2755, hinting that the late January low at 1.2586 could mark a temporary bottom. This breakout, alongside a weekly slow stochastic indicator rising from oversold conditions, points toward a recovery bias for the pair as the second quarter approaches.
Nevertheless, a significant reversal is not anticipated yet. Any upward movement is likely to encounter substantial resistance at 1.2900, which aligns with a major declining weekly trendline, and at 1.2950, corresponding to the 55-week EMA. For a sustained recovery, USD/SGD needs to remain above the 1.2586 support, with 1.2660 serving as a near-term floor.
Recently, USD/SGD surpassed the major declining weekly trendline resistance and climbed to 1.2929, nearing the 55-week EMA at 1.2940, before experiencing a sharp pullback. The fading bullish momentum could keep the pair under pressure in the short term; however, a positive weekly MACD reading suggests it is too soon to expect a prolonged decline.
Support is currently situated at the minor ascending weekly trendline at 1.2760. While a dip below this level is possible, unless downward momentum increases, the 1.2660 support is expected to hold. The likelihood of USD/SGD breaking below the late January low of 1.2586 remains minimal for now.
On the resistance side, the 55-week EMA at 1.2939 continues to act as a formidable barrier to further gains.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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