UOB’s Quek Ser Leang notes that USD/SGD’s sharp drop toward 1.2900 looks overdone, but the pair may still test support near 1.2890 in the near term before stabilising. Intraday resistance is seen around 1.2935/1.2950, while over the next one to three weeks the bank expects USD/SGD to trade in a slightly higher 1.2890–1.2990 range.
Short-Term Downside, Broader Range
24-hour view: “We did not expect the sharp drop in USD yesterday that sent it to a low of 1.2901 (we had expected range-trading). While the sharp drop appears to be overdone, the decline has not quite stabilised. Today, USD could dip below the 1.2900 level and potentially test the major support at 1.2890. A clear break below 1.2890 is unlikely. Resistance is at 1.2935; a breach of 1.2950 would suggest that the decline has stabilised.”
1–3 week view: “On Tuesday (30 Jun, spot at 1.2930), we indicated that USD is neutral now and expected it to trade in a range between 1.2870 and 1.2970. After USD rose to 1.2975 and then pulled back, we highlighted the following yesterday (02 Jul, spot at 1.2960): the slight uptick in momentum is not sufficient to indicate a sustained advance. We continue to expect range-trading, but we are revising our expected range higher to 1.2890/1.2990. We continue to hold the same view.”
