USDSGD Technical Analysis for Singapore Brokers
Contents
Introduction
The USD proves to be a dominant and global reserve currency as it beats the Singapore dollar across all Singapore brokers trade terminals, following an increase in the US dollar Index.
How long should we expect this move to last? Let’s find out as we uncover the technical chart setups and fundamental drivers of the USDSGD.
Singapore Consumer Price Index (CPI)
One of the major indices that can be used to evaluate the change in inflation and purchasing sentiment is The Singapore Consumer Price Index.
Having the outlook of the consumer in mind, the CPI evaluates any changes in the price of goods and services.
Following the latest release for the CPI, which shows that the actual reading is 0.8%, while the previous reading is 0.6% and the forecast figure is 0.7%, traders can expect a bearish sentiment for the Singapore Dollar.
U.S. Building Permits
The Building Permits index is an indicator that considers the change in the number of new building permits issued by the government.
When the number of permits issued is lower than expected, a bearish move is expected for the currency. When the number of permits issued is higher than expected, positive sentiment is expected for the currency.
Following the latest release made on January 17, which shows that the actual reading is 1.416M, while the previous reading is 1.474M, and the forecast figure is 1.468M, traders can expect a bearish sentiment for the USD.
USDSGD Technical Analysis
USDSGD Long term Outlook: Bullish
Monthly Chart
After a regular bearish divergence pattern on Jan 02 ’17, the USDSGD entered a bearish trend for a price decline of about -10.57% and bottomed at 1.30088 on Jan 01 ’18.
The bulls took over control of the market direction to set a double top chart formation after a price increase of about 6.64%.
A hidden bullish divergence signaled a price bottoming on 1.34450, as the USD to SGD exchange rate head towards the 200MA.
Weekly Chart
The foreign exchange of the USDSGD signaled a bear trap price pattern while forming a double bottom chart formation on the Mar 18 ’19 support (1.34541), and consequently leading to an increase in demand for the US dollar.
A further hike in demand by the bulls forced the pair into the overbought region and threatened an established 1.39422 resistance set up on Sep 02 ’19.
Let’s take one step lower to the daily time frame for a buildup of the recent bullish thrust.
USDSGD Mid-Term Outlook: Bullish
Daily Chart
Cyclic chart patterns in the form of bearish and bullish divergence patterns are major drivers of the USDSGD foreign exchange from the above daily chart.
After a sequence of bearish divergence setups on Sep 03 ’19, Oct 01 ’19, and Dec 02 ’19, the USDSGD flags a regular bullish divergence formation on Dec 31 ’19 forcing the exchange rate to skyrocket by 4.7%, and trading in the overbought zone.
We suggest that traders activate their trailing stop order from this point as a way to mitigate risk while locking in some profit.
H4 Chart
Similarly, the 4hour overview signaled a regular bearish divergence on Jan 16 ’20 14:00 and shot the USDSGD rates way beyond the 200MA.
After ascending for about 1.91% from the initial bullish divergence, the bulls increase their positions, which appeared in the form of hidden bullish divergence patterns on Feb 04 ’20 18:00 and Feb 12 ’20 06:00.
Conclusion
The USD has shown a huge dominance over the Singapore dollar in the last five weeks now, and we expect traders to start locking in their open long positions. Subsequent long or short order entries at the current region are expected to be held with a scalper’s mindset as we expect a slowing of the pair while approaching the 200MA on the monthly TF.
I've been a professional trader for over 5 years.
Currently I work as forex analyst for different investment companies.
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