Singapore Dollar: Upside momentum eases against US Dollar – UOB

United Overseas Bank's analysts Quek Ser Leang and Lee Sue Ann observe that the USD/SGD exchange rate is experiencing a minor decline, but the short-term momentum remains stagnant, confining the pair within a narrow 1.2700 range. The bank's outlook for the next 1-3 weeks is pessimistic, with a focus on the 1.2670 support level. Should the rate surpass 1.2740, it would indicate a shift towards range-trading, diminishing the chances of further downside movement.

Over the past 24 hours, the USD experienced a low of 1.2682 and closed at 1.2699, a 0.19% decrease. Yesterday, it was noted that while the dollar was still on a declining trend, it was more likely to trade within the range of 1.2680/1.2715. In fact, the USD traded in a narrower range than anticipated (1.2688/1.2711) and ended at 1.2707, barely changed.

Momentum indicators remain mostly flat, and expectations continue to be that the USD will trade in this range today, likely between 1.2690 and 1.2720. The bank has maintained a negative stance on the USD since early in the month. While the risk of further dollar decline remains, the rate of decline may be slowing due to oversold conditions.

The next critical level to watch is 1.2670. Over the past 24 hours, the USD hovered between 1.2688 and 1.2711, finally closing at 1.2707. A break above 1.2740, considered strong resistance, would suggest the USD has entered a range-trading phase.