The USD/SGD exchange rate has remained under pressure in the past few weeks as the US dollar has softened recently. It was trading at 1.2725 on Wednesday, down from the year-to-date high of 1.2925.
Singapore Dollar Gains as the Greenback Slips
The USD/SGD exchange rate has remained in a downward trend in the past few weeks as the greenback has pulled back across the board. Data shows that the US Dollar Index (DXY) has dropped to $98 from the year-to-date high of $100.65.
The dollar has dropped recently as investors have embraced a risk-on sentiment, as evidenced by the ongoing stock market surge, with the Dow Jones and S&P 500 indices rising to a record high this year. Crude oil prices have pulled back from the highest point this year.
Singapore’s economy, on the other hand, is doing well despite showing some signs of moderation. It expanded by 4.6% in the first quarter after growing by 5.7% in the previous quarter. Another report showed that Singapore’s retail sales jumped by 8.3% in February, rebounding sharply from minus 0.5%.
The USD/SGD exchange rate also wavered after the US published the latest retail sales report. According to the Commerce Department, retail sales rose by 1.7% MoM in March, a big improvement from the previous 0.7%. It jumped by 4.0% on an annualized basis.
Another report showed that the country’s pending home sales dropped by 1.1% in March from the previous 0.8% as the housing sector worsened.
USD/SGD Technical Analysis
The USD/SGD pair has been in a downward trend in the past few weeks, moving from a high of 1.2926 in March to the current 1.2735. It has remained slightly above the Major S/R pivot point of the Murrey Math Lines tool.
The pair has remained below the 50-day and 100-day Exponential Moving Averages (EMA). It has also formed a head-and-shoulders-like pattern, a common bearish reversal sign in technical analysis.
Therefore, the pair will likely continue falling, potentially to the Strong, Pivot, Reverse level of the Murrey Math Lines tool at 1.1573. On the other hand, a move above the key resistance level at 1.2760 will invalidate the bearish outlook.
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Crispus Nyaga is a financial analyst, coach, and trader with more than 8 years in the industry. He has worked for leading companies like ATFX, easyMarkets, and OctaFx. Further, he has published widely in platforms like SeekingAlpha, Investing Cube, Capital.com, and Invezz. In his free time, he likes watching golf and spending time with his wife and child.
