US Dollar Strength Meets SGD Resistance Band

According to UOB's Quek Ser Leang, the Singapore Dollar (SGD) has seen limited downtrend against the US Dollar (USD). The USD/SGD exchange rate rose towards 1.2725 due to the strengthening of the US dollar broadly and the SGD Nominal Effective Exchange Rate (NEER) staying around 1.65% above its mid-point.

Leang notes that while there is strong but overbought short-term momentum, intraday gains are likely capped near 1.2725 with major resistance at 1.2755. For the coming weeks, UOB expects USD/SGD to stay supported above 1.2665 while targeting 1.2755.

Looking at the 24-hour view, Leang says that while upward momentum remains relatively strong, overbought conditions suggest any advance today is likely limited to a retest of 1.2725. Support is at 1.2690, followed by 1.2680.

In the 1-3 weeks view, UOB highlighted last Friday (11 Sep) that it turned positive on USD but only if it broke above 1.2705. The price action suggests that USD could continue to rise toward 1.2755, as long as it holds above the 'strong support' at 1.2665.