Singapore Dollar: Downward bias holds within tight range against US Dollar – UOB
United Overseas Bank’s Quek Ser Leang and Lee Sue Ann note that USD/SGD stayed firm on Monday, closing at 1.2945 after trading between 1.2906 and 1.2950, with the Singapore Dollar (SGD) Nominal Effective Exchange Rate (NEER) holding 1.68% above its mid-point. They see short-term upward momentum building, but expect gains to be capped below 1.2990, with support around 1.2935/1.2920 and a broader 1.2890–1.2990 range.
Dollar strength capped below resistance
"24-HOUR VIEW: After USD opened on a firm note yesterday, we highlighted the following: “Upward momentum is tentatively building, and the bias for USD today is tilted to the upside. However, it is unclear for now whether there is sufficient momentum for a break above 1.2955 (there is another resistance level at 1.2945).” USD then rose to a high 1.2950. Upward momentum has increased further, but not significantly. Today, USD could edge above 1.2955 and test 1.2965. We do not expect the major resistance at 1.2990 to come under threat. Support is at 1.2935, followed by 1.2920."
"1-3 WEEKS VIEW: In our most recent narrative from last Thursday (09 Jul, spot at 1.2940), we indicated that the recent “mild downward pressure has eased,” and USD “is likely to trade in a range between 1.2890 and 1.2990.” While USD has remained within the range, the tentative build-up in short-term upward momentum suggests USD is likely to edge higher from here. However, the likelihood of a break above 1.2990 is not high for now. To sustain the momentum build-up, USD must hold above 1.2900 (‘strong support’ level)."
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