Singapore Dollar: Downtrend seen limited against US Dollar – UOB

UOB’s Quek Ser Leang notes USD/SGD extended gains toward 1.2725 as the US Dollar strengthened broadly and Singapore Dollar (SGD) Nominal Effective Exchange Rate (NEER) stayed around 1.65% above its mid-point. Leang sees strong but overbought short-term momentum, with intraday gains likely capped near 1.2725 and major resistance at 1.2755. For the coming weeks, UOB expects USD/SGD to stay supported above 1.2665 while targeting 1.2755.

Dollar strength meets SGD resistance band

"24-HOUR VIEW: We did not expect USD to soar to a high of 1.2725 yesterday (we had expected range-trading). USD eased from the high to close 0.32% higher at 1.2706. While upward momentum remains relatively strong, overbought conditions suggest any advance today is likely limited to a retest of 1.2725. Even if USD breaks above 1.2725, is unlikely to threaten the major resistance at 1.2755. Support is at 1.2690, followed by 1.2680."

"1-3 WEEKS VIEW: While we turned positive on USD last Friday (11 Sep, spot at 1.2680), we highlighted that “it must clearly break above 1.2705 before a sustained rise is likely.” In a sharp move yesterday, USD soared above 1.2705, printing a high of 1.2725. The price action suggests that USD could continue to rise toward 1.2755. To keep the momentum going, USD must hold above the ‘strong support’ at 1.2665 (level previously at 1.2640)."

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