USD/SGD has been trading choppily in a subdued range, moving largely in line with the US dollar, oil and US Treasury yields, and was last seen around 1.2780. Chart indicators point to mild bullish momentum beginning to fade, with the RSI easing, while two-way trade remains likely.
OCBC keeps a bias to sell rallies, flagging support at 1.2720/60, where the 21- and 100-day moving averages converge with the 61.8% Fibonacci retracement from the 2026 low to high, and then at 1.2650/70, which marks the 76.4% Fibonacci level. Resistance is seen at 1.2840/50, aligning with the 23.6% Fibonacci retracement and the 200-day moving average. The S$NEER was last 1.85% above its model-implied mid.
Choppy Price Action And Fading Bullish Momentum
We are observing the USD/SGD pair trading choppily within a subdued range, taking its cues from the broader US dollar and Treasury yields. With the pair currently near 1.2780, the mild bullish momentum is showing clear signs of fading. Our bias remains to treat any upward movements as selling opportunities.
This view is strengthened by recent US inflation data coming in slightly below forecast at 2.9% last week, which has pushed the 10-year Treasury yield down to 3.48%. In Singapore, a strong non-oil domestic export report for April gives the Monetary Authority of Singapore room to maintain its policy of gradual currency appreciation. The Singapore dollar nominal effective exchange rate (S$NEER) remains strong, trading at a premium of over 1.8% to its policy mid-point.
Trading Strategies And Key Technical Levels
Considering this, we favor selling into any strength as the pair approaches the 1.2840/50 resistance area. For derivative traders, selling out-of-the-money call spreads with strike prices above 1.2850 for June expiration seems like a prudent strategy. This approach benefits from both a sideways or a downward move in the underlying pair.
Alternatively, traders looking for a directional move could consider buying put options if the pair breaks below initial support around 1.2760. A decisive move below the 1.2720/60 support zone could trigger a faster decline toward the next major support at 1.2650. Historically, when USD/SGD has failed to hold the 100-day moving average after a rally, a retest of lower levels has followed.
