USD/SGD Monthly
Singapore dollar falls to new 4-year lowIBTimes UK/FXStreet

The Singapore currency continued to fall against the US dollar on 23 February and held near the recent four and a half year low as data showed consumer prices maintained the downtrend in the island nation in January, taking the index deceleration rate to five-year levels.

The USD/SGD rose to 1.3614 from Friday's close of 1.3602, holding closer to 1.3639, its highest since August 2010 touched on 12 February.

The Singapore currency is on track to end its sixth straight month of losses in February even though the greenback has shown weakness against most of its counterparts this month after several months of continuous rise.

The CPI rate of Singapore fell 0.4% from a year earlier in January, its lowest since early 2010, data showed on 23 February. The monthly rate stood at -0.2% in line with expectations.

The outlook for the US dollar has weakened slightly after last week's FOMC minutes that showed the Fed officials are not as keen as they were a few months ago to raise interest rates in the world's largest economy.

After the disappointing German IFO numbers, the market is now waiting for US existing home sales data scheduled for the day, but the focus is on Fed chair Janet Yellen's Congress testimony on 25 February as well as the two speeches by ECB President Mario Draghi, due on the 24th and the 25th.

The big central bankers are likely to explain their recent decisions and their take on the global as well as local economic scenario.

Technical levels

Technically, the USD/SGD pair is testing the 1.3648 resistance barrier and a break of that will open doors to 1.3777. The pair will then target the 1.4158-1.4258 region.

On the downside, the USD/SGD has its first target at 1.3443 but 1.3204 will be key, a break of which will confirm the reversal of the uptrend since August last year.

In other words, as long as the 1.3200 support holds, the pair has risks more towards north. However, a break of 1.2862 will significantly weaken the uptrend and open up new lows below the last year low of 1.2363.