Singapore Dollar: Strong Dollar keeps pair supported – OCBC

OCBC strategist Christopher Wong highlights that Singapore Dollar (SGD) remains largely driven by the broader Dollar story after the FOMC, given its high sensitivity to USD moves. He maintains a cautious stance on SGD if US Dollar Index (DXY) and front-end US yields extend higher, with USD/SGD temporarily supported. However, he notes that softer US activity, labour-market or inflation data could see USD/SGD downside re-emerge.

Singapore Dollar tied to US data

"SGD may still see some weakening pressure alongside the broader USD move after the FOMC, given its relatively high sensitivity to shifts in the USD. We would retain a slight cautious stance on SGD if DXY and front-end US yields extend higher through the Asian session."

"The Fed’s hawkish shift may keep USD/SGD temporarily supported in the near term, however this does not change the broader sensitivity to US data. If incoming US activity, labour market or inflation readings begin to soften and rate expectations are pared back, downside in USD/SGD could re-emerge."

"Daily momentum is bullish but RSI rose to near overbought conditions. Price action suggests a potential hanging man pattern with death cross in the making (50 DMA cuts 200 DMA to the downside)."

"We watch further price action for confirmation for any bearish reversal or if bearish signals are being nullified. Area of resistance at 1.2790 (50% fibo retracement of 2026 low to high) - 1.2810 (50, 100, 200 DMAs). Next level at 1.2840 (38.2% fibo). Support at 1.2740 (61.8% fibo), 1.27 (21 DMA)."

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