USD/SGD: Defensive profile shapes tactical trades – OCBC

OCBC’s Christopher Wong notes that USD/SGD has rebounded on stalled US–Iran ceasefire talks, with fading bearish momentum and rising RSI. He highlights resistance around 1.2750/60 and key support at 1.2670, arguing that Singapore Dollar (SGD) has behaved as a regional defensive currency and may eventually underperform higher-beta peers like Malaysian Ringgit (MYR), South Korean Won (KRW), Australian Dollar (AUD) and Taiwan Dollar (TWD) once markets rotate from defence to rebound.

Defensive SGD may later lag high beta FX

"USD/SGD rebounded overnight following the stalemate in US-Iran ceasefire talks."

"Bearish momentum on daily chart is fading while RSI rose. Resistance at 1.2750/60 levels (50 DMA, 50% fibo), 1.28 levels (21, 100 DMAs, 38.2% fibo retracement of 2026 low to high), 1.2850 (200 DMA, 23.6% fibo). Key support at 1.2670 (76.4% fibo). Decisive break puts next support at 1.2620, 1.2590 levels. "

"Taking stock on SGD moves so far, one can describe that SGD behaves like a regional defensive currency. During the Iran-war shock phase (defined as 1 Mar to before ceasefire announcement), SGD held better against most Asian peers, including JPY, KRW, THB, PHP and MYR."

"On relative terms, SGD’s resilience against some FX can last as long as the geopolitical backdrop stays uncertain enough to keep demand for lower-beta Asian currencies intact. When the immediate geopolitical stress fades and markets rotate back into pro-cyclical and tradesensitive currencies, especially those linked to tech, global growth and broader risk recovery. "

"Then the SGD strength may fade and could even underperform some of the higher-beta currencies on a relative basis once markets move from “defence” to “rebound.” So, in a way, there is room for MYR, KRW, AUD or TWD to play catch-up in a relief/risk-on environment."

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