USD/SGD: Upside risks as Hormuz crisis persists – OCBC

OCBC strategists Sim Moh Siong and Christopher Wong flag slight upside risks for USD/SGD as the Hormuz standoff weighs on risk appetite and imported cost pressures. While Singapore Dollar (SGD) remains a regional defensive currency, they note fading bearish momentum and rising RSI on USD/SGD, alongside expectations that Singapore inflation will accelerate toward 2% as energy-related costs from the Middle East conflict pass through supply chains.

Defensive SGD faces inflation pressures

"Slight upward risk. USD/SGD inched higher overnight tracking the broad USD rebound."

"Pair was last at 1.2780 levels. Bearish momentum on daily chart faded while RSI rose."

"Risks somewhat skewed to the upside for now. Resistance here at 1.2790/1.28 levels (21, 100 DMAs, 38.2% fibo retracement of 2026 low to high), 1.2850 (200 DMA, 23.6% fibo)."

"Support at 1.2750/60 levels (50 DMA, 50% fibo), 1.2670 (76.4% fibo). On relative terms, SGD can continue to trade like a regional defensive play, holding up better against higher-beta FX."

"Looking ahead our economists see the prolonged US-Iran war and the continued closure of the Strait of Hormuz to trigger energy and petrochemical-related costs for businesses which could add to the inflationary pass-through into 2Q26 and potentially beyond."

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