Singapore Dollar: Consolidation near 1.28 with upside risks against US Dollar – OCBC

OCBC’s Sim Moh Siong and Christopher Wong note USD/SGD is consolidating around 1.28 as softer United States (US) Producer Price Index (PPI) trims Federal Reserve (Fed) hike expectations but fails to trigger fresh US Dollar (USD) selling. While they still see downside risks over time, geopolitical tensions and the pair’s inability to break lower suggest the next leg down may be challenging.

Range trade, geopolitics and support levels

"USD/SGD remained subdued around 1.28 overnight. Softer-than-expected US PPI saw Fed hike expectations pared further and US Treasury yields eased, but the USD showed little follow-through to the downside."

"Geopolitical uncertainty may be partly tempering appetite to chase the USD lower, particularly heading into the weekend. Houthis claimed fresh drone attacks on Saudi Aramco’s Jazan refinery, while the US said it could maintain its naval blockade of Iranian ports indefinitely."

"We continue to see downside risks over time, but the pair’s inability to break lower despite softer US inflation data suggests the next leg down may not be straightforward. Weekend geopolitical risks may also keep some defensive USD demand in play for now."

"Pair last seen at 1.28 levels. Mild bearish momentum on daily chart intact while RSI was flat. 2-way trades likely in recent range."

"Support at 1.2770 (recent low), 1.2740 (61.8% fibo). Resistance at 1.2830/40 levels (100, 200 DMAs, 38.2% fibo retracement of 2026 low to high), 1.2870/90 levels (21, 50 DMAs, 23.6% fibo)."

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