OCBC strategists Sim Moh Siong and Christopher Wong see USD/SGD rebounding after what he characterizes as a relief, not reversal, move lower. They stress fluid geopolitical headlines and warns that further US–Iran escalation and higher Oil could revive inflation and growth concerns, keeping upward pressure on USD/SGD. Nonetheless, Singapore Dollar (SGD) is expected to show relative resilience, with the pair likely to trade two-way near term.

Geopolitics and oil keep upside risks alive

"USD/SGD rebounded overnight, in line with our caution that the earlier move lower in USD/SGD was more a relief than a reversal trade."

"We reiterate that geopolitical headlines remain fluid, and any renewed spike in oil price could quickly revive concerns over inflation, growth and broader risk sentiment. We continue to keep a close eye on US-Iran developments, if there is any tit-for-tat response from the US. "

"Further escalation will still pose upward pressure to USD/SGD as SGD is not immune to a firmer USD, higher US Treasury yields or weaker regional risk sentiment."

"But amongst Asian FX, SGD should continue its relative resilience. Pair was last at 1.2765 levels. Daily momentum and RSI indicators are not showing a clear bias for now. 2-way trades likely in the interim, though bias remains to sell rallies."

"Resistance at 1.2850 (200 DMA, 23.6% fibo). Support at 1.2720 (61.8% fibo retracement of 2026 low to high), 1.2680 levels."

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