United Overseas Bank’s Quek Ser Leang notes that USD/SGD is currently under near-term pressure toward 1.2760, but the broader technical backdrop still points to a recovery phase in the second quarter. Key support is seen at 1.2660 and 1.2586, while the 55-week EMA around 1.2940 remains a significant resistance cap.

Recovery bias but short-term downside risk

"As of early March, USD/SGD has broken above the minor declining weekly trendline near 1.2755, indicating that the late-January low of 1.2586 may have been a near-term low. The breach of the trendline resistance, combined with the weekly slow stochastic turning higher from oversold territory, suggests that the risk is tilted toward a recovery in USD/SGD in the second quarter."

"However, it is premature to expect a major reversal, as any advance is expected to face significant resistance at 1.2900 (major declining weekly trendline) and 1.2950 (55-week EMA. For the expected recovery to materialise, USD/SGD must hold above the 1.2586 low, with near-term support at 1.2660."

"Last week, USD/SGD broke above the major declining weekly trendline resistance. Two days ago, USD/SGD rose to 1.2929, close to the 55-week EMA at 1.2940, before a sudden plunge sent it lower. Fading upward momentum may keep USD/SGD under pressure in the near term, but a positive weekly MACD suggests it is too early to call for a sustained move lower."

"Support is at the minor rising weekly trendline, now at 1.2760. A break below this level cannot be ruled out, but absent a pickup in downward momentum, the support at 1.2660 is unlikely to come under threat. The odds of USD/SGD breaking the late-January low of 1.2586 appear slim for now."

"On the upside, the 55-week EMA at 1.2939 remains a significant resistance."

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