The Singapore Dollar is settling into a holding pattern against the US Dollar, trading within a narrow band rather than picking a clear direction. According to United Overseas Bank (UOB) analyst Quek Ser Leang, the downward push in USD/SGD has slowed markedly after last week's sharp drop, and the pair is expected to stay between 1.2900 and 1.2935 on an intraday basis. In short, the market is in no mood for a big move right now, with both sides of the trade capped.
In a stretch like this, it helps to remember what support and resistance actually mean. Support is the level where a decline is expected to lose steam, while resistance is the ceiling that price struggles to break through. At the moment, those two walls are exactly what is boxing in the Dollar against the Singapore Dollar.
The next 24 hours
Last Thursday, the US Dollar fell sharply to a low of 1.2901. The read going into Friday was that while the slide looked overdone, it had not fully stabilised. The expectation was that the Dollar could dip below 1.2900 and potentially test the major support at 1.2890, though a clean break of that level looked unlikely. On the upside, resistance sat at 1.2935, and a move past 1.2950 would signal that the decline had steadied.
That is broadly how it played out. The Dollar first slipped to a low of 1.2896, then recovered to close largely unchanged at 1.2919, a gain of just 0.02%. With downward momentum easing, the more likely outcome is that the Dollar trades within a range today, probably between 1.2900 and 1.2935, rather than falling further.
The one to three week view
On a slightly longer horizon, the stance on the Dollar turned neutral early last week. The most recent take came on Thursday, 02 July, with spot at 1.2960. At that point the expectation was still for range-trading, though the projected band was nudged higher to 1.2890/1.2990. On Friday, the Dollar drifted toward the lower end of that range, printing a low of 1.2896.
The mild pickup in downward momentum is not strong enough to point to a sustained decline. For now, the view remains that the Dollar keeps oscillating between 1.2890 and 1.2990.
Why the longer-term bias still favours the Dollar
Set against that near-term lull, weekly momentum remains firm and continues to favour further USD/SGD strength. Over the longer run, that momentum could carry the pair toward 1.3000 and potentially on to 1.3095. So while the immediate picture is one of consolidation, the bigger frame still tilts in the Dollar's favour.
Beyond the Singapore Dollar: how the other majors are trading
Turn to the other big currencies, and the British Pound ticked lower against the US Dollar on Monday, edging close to ending a seven-day rally. The trigger is renewed tension in the Strait of Hormuz, one of the critical points in the peace process between Washington and Tehran. GBP/USD was trading near 1.3340 at the time, down from last week's highs of 1.3387, though its near-term bullish trend remains intact.
The Euro, by contrast, shook off an early soft tone. On Monday, EUR/USD advanced toward the 1.1440 to 1.1450 band and posted a modest gain on the day. Those mild gains came thanks to the lack of clear direction in the Greenback during an apathetic start to the week.
Gold came under fresh downside pressure on Monday. Reversing three daily gains in a row, it ran into initial resistance around the $4,200 per troy ounce mark. With renewed tension around the Strait of Hormuz weighing on sentiment, safe-haven demand shifted toward the US Dollar instead of the metal, capping its upside.
As the king among safe havens, the Swiss Franc is supposed to gain from geopolitical shocks such as the Iran war. This time, it did not. After a sharp decline that came alongside the war in Iran and the closure of the Strait of Hormuz, the Swiss Franc now sits nearly 6% below its January peak against the US Dollar.
Eyes on the Fed after Sintra
Financial markets went to Sintra hoping for clues about the Federal Reserve's next move. What they mostly came away with was confirmation that Fed Chair Kevin Warsh intends to make those clues much harder to find. That points to deeper uncertainty over the path of interest rates in the days ahead, and it is exactly that uncertainty that will keep shaping how the Dollar and its peers trade.
