Technical Outlook of Singapore Dollar

Singapore Dollar (also known as SGD) has increasing became popular as a trading instrument for forex traders

This article looks at the future performance of Singapore Dollar from the Technical Outlook point of view.

Known to many traders, Singapore Dollar is one of the best trending currency for the past few years – It was at a high of 1.42 in mid 2010 and went to a low of 1.20 in slightly more than a year. This represents a decline of 2200 pips. On a daily trading range,  it is not as wide volatility as Forex Majors (such as EURUSD, GBPUSD, USDCHF) because the Singapore dollar is allowed to float (within an undisclosed bandwidth of a central parity) but closely monitored by the Monetary Authority of Singapore (MAS) against a concealed basket of currencies of Singapore’s major trading partners and competitors. However, Singapore government manages it actively by strengthening Singapore Dollar against US Dollar to manage inflation. This also result Singapore Dollar to rise against US Dollar at a slow but steady rate.

On the technical outlook, we are able to use Tflow® – a methodology based on Applied Elliott Wave and Advance Fibonacci to predict future prices.

We work on the assumption that downtrend of Singapore Dollar will continue as MAS actively manages it.

 

Technical Outlook of Singapore Dollar

Singapore Dollar is currently supported at 1.25 region. This support is holding up for the past 10 months.

A breakdown of this support will lead Singapore Dollar versus US Dollar to next level of support around 1.18-1.19. However, from Elliott Wave analysis, the stronger support lies in 1.13-1.14.

Chart of Singapore Dollar

Technical Outlook on Singapore Dollar

Implications of strengthen Singapore Dollar to Spending Power

On the assumption that Singapore Dollar continues to strengthen, Singaporean will have stronger spending power, likewise, our imports are going to be cheaper. However over long run, we will lose our competitiveness as our exports of services and high end goods become more expensive.

 

 

Leave a Reply