Singapore Dollar: Further gains hinge on USD weakness – UOB

United Overseas Bank’s (UOB) Quek Ser Leang and Lee Sue Ann note that USD/SGD slipped as the US Dollar softened after the US midterm elections, with the pair closing near 1.2795. For the intraday horizon, they see a mild downside bias but expect losses to hold above 1.2755, while over the next one to three weeks, a close below 1.2775 would open the way to the 1.2755 major support.

Downside bias but key floor intact

"24-HOUR VIEW: Two days ago, USD edged to a high of 1.2817. Yesterday, we indicated that “the increase in upward momentum is insufficient to indicate a continued advance,” and we were of the view that USD “is likely to range-trade between 1.2790 and 1.2820.” Instead of range-trading, USD declined to 1.2775 before rebounding. USD closed at 1.2795 (-0.16%), but it traded on a soft note in the early Asian trade today. There has been a tentative increase in downward momentum, and the bias for USD today is tilted to the downside. Based on the prevailing momentum, any decline is unlikely to reach 1.2755. There is a minor support at 1.2760. Resistance is at 1.2800."

"1-3 WEEKS VIEW: We have been holding the same view since last Tuesday (27 Oct, spot at 1.2810), when we highlighted that USD “is likely to trade between 1.2775 and 1.2835.” Yesterday, USD tested the lower boundary of our expected range with a low of 1.2775. The tentative increase in downward momentum suggests USD could edge below 1.2775. If USD closes below this level, it could then likely challenge the major support at 1.2755. To sustain the momentum, USD must hold below 1.2815."