United Overseas Bank strategists (UOB) Quek Ser Leang and Lee Sue Ann note that USD/SGD was little changed on Thursday, trading in a narrow band as safe-haven flows and Oil gains supported the US Dollar against Asian currencies. Their short-term view sees modest downside within 1.2755–1.2780, while the 1–3 week outlook stays negative toward 1.2750 as long as 1.2795 caps.

Modest downside while capped below resistance

“24-HOUR VIEW: After USD traded within a tight 1.2771/1.2783 range two days ago, we indicated yesterday that “the price action provides no fresh clues.” We also indicated that USD “could trade between 1.2765 and 1.2785.” USD then traded within a slightly wider range of 1.2762/1.2785, closing unchanged at 1.2774. There has been a slight increase in downward momentum, but it is insufficient to indicate a sustained decline. Today, USD could edge lower, but any decline should stay within a 1.2755/1.2780 range.”

“1-3 WEEKS VIEW: We turned negative on USD early this week. In our most recent narrative from Wednesday (21 Oct, spot at 1.2780), we highlighted that “downward momentum has increased further, and USD could decline to 1.2750.” Although USD has traded in a quiet manner since then, we will continue to hold the same view as long as USD holds below 1.2795 (‘strong resistance’ level previously at 1.2805).”