Singapore Dollar: Upside momentum eases against US Dollar – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that USD/SGD remains under mild downward pressure but short-term momentum is flat, keeping the pair in a tight intraday band around 1.2700. Their 1–3 week bias stays negative, with focus on support at 1.2670, while a break above 1.2740 would signal a shift into range-trading and reduce prospects of further downside.

Downside bias but momentum easing

"24-HOUR VIEW: USD fell to a low of 1.2682 last Friday and then closed at 1.2699 (-0.19%). Yesterday, we highlighted that “despite declining, there has been no significant increase in downward momentum, and instead of continuing to decline today, USD is more likely to trade in a range of 1.2680/1.2715.” USD then traded within a narrower range than expected (1.2688/1.2711) and closed little changed at 1.2707 (+0.06%). Momentum indicators are mostly flat, and we continue to expect USD to trade in a range today, most likely between 1.2690 and 1.2720."

"1-3 WEEKS VIEW: We have been holding a negative USD stance since early this month. In our most recent narrative from last Thursday (20 Aug, spot at 1.2710), we highlighted that “while the risk for USD remains on the downside, oversold conditions could slow the pace of any further decline.” We also highlighted that “the next level to monitor is 1.2670.” USD dipped to a low of 1.2682 last Friday, but yesterday, it traded in a quiet manner between 1.2688 and 1.2711. Downward momentum is starting to slow, and a break above 1.2740 (‘strong resistance’ was at 1.2750 yesterday) would indicate USD has likely entered a range-trading phase."

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