USD/SGD: Bullish momentum fades – OCBC
|S$NEER continued to ease; last at 0.9% above model-implied mid. Looking back, SGD has been easing since Oct-2024 on trade-weighted terms even as MAS maintained policy status quo. Pair was last seen at 1.3431.
Signs of some degree of bearish pullback in the near term
“That said, SGD remains stronger vs. peers in the basket but it is just less strong today (vs. than for most of the year). Historically the positive correlation between the change in S$NEER and MAS core inflation shows that SGD strength can ease when core inflation eases materially. Monday’s release of CPI report saw both headline and core CPI surprised to the downside. The sharp pullback has also led to chatters if MAS would ease soon at the next MPC in Jan-2015.”
“We think there is no hurry to ease amidst many moving parts – tariff threats, geopolitics – which may see price pressures return. MAS is better off monitoring further to avoid any risk of flip-flopping on policy. MAS maintaining policy status quo suggests that SGD can still remain somewhat resilient on trade-weighted terms. At some point in 2Q or 3Q in 2025, MAS may ease policy if core CPI does ease further.”
“USD/SGD eased, alongside the pullback seen in broad USD. Mild bullish momentum on daily chart continues to fade while RSI is flat. Bearish divergence on MACD appears to be playing out. Technical patterns suggest signs of some degree of bearish pullback in the near term. Support at 1.3410, 1.3340 (200 DMA) and 1.3290 (61.8% fibo retracement of Jun high to Oct low). Resistance at 1.3520 levels.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.