Singapore Dollar: Volatility widens range-trading band against US Dollar – UOB

United Overseas Bank‘s (UOB) Quek Ser Leang and Lee Sue Ann note that USD/SGD has retreated sharply after last week’s spike, but downside momentum remains limited. The pair is expected to stay within a broader 1.2680–1.2780 band in coming weeks, with intraday pullbacks likely holding above 1.2695 and resistance at 1.2725/1.2735. The S$NEER remains elevated, implying a 1.2676–1.2740 trading range.

Dollar-Singapore range widens on volatility

“24-HOUR VIEW: Following last Fridays sharp rise to 1.2754, we highlighted the following yesterday: ”While the rapid rise has scope to extend, overbought conditions suggest any advance could be contained within a range of 1.2725/1.2765. Even if USD were to break above 1.2765, the major resistance at 1.2780 is unlikely to come into view.“ Our assessments turned out to be incorrect, as USD staged a surprisingly sharp pullback to 1.2710. This time around, the pullback has scope to extend, but given that there has been no clear increase in downward momentum, any decline is unlikely to break below 1.2695. Resistance is at 1.2725, followed by 1.2735.”

“1-3 WEEKS VIEW: After maintaining a negative USD view for about a month, we indicated yesterday (31 Aug, spot at 1.2750) that ”we are revising our view from negative to neutral, and from here, we expect USD to trade in a range between 1.2705 and 1.2780.“ We did not expect USD to retreat sharply to a low of 1.2710. Despite the sharp retreat, USD remains neutral for now, as there has been no clear increase in downward momentum to suggest a resumption of the recent weakness. However, the increase in volatility points to wider range-trading between 1.2680 and 1.2780.”