Forex Market: USD/SGD daily forecast

During yesterday’s trading session USD/SGD traded within the range of 1.2370-1.2413 and closed at 1.2404, gaining 0.25% for the day.

At 7:01 GMT today USD/SGD was gaining 0.06% for the day to trade at 1.2411. The pair touched a daily high at 1.2420 at 5:55 GMT.

Fundamental view

United States

Durable goods orders in the United States probably rose 0.5% in June, according to the median forecast by experts, following a revised 0.9% drop during the prior month. Durable goods orders, as an indicator, gauge the strength of US manufacturing sector and represent a major portion of nations Factory Orders. This is a closely watched report on manufacturing activity, because durable goods are the first type of goods to be affected by an economic downturn or upturn.

Durable goods are designed to last three or more years and encompass aircraft, automobiles and buses, cranes, machine parts, appliances etc. More than 85 industries are represented in the sample, which covers the entire United States. The logic behind this indicator is that consumers need to be very optimistic in order to buy an automobile in comparison with, for example, first necessities such as food or clothing. Therefore, durable goods are among the first goods, which a consumer may abstain from purchasing, in case overall economic activity begins to contract. The same is valid for company purchases. During a recession, an airliner is less likely to purchase new planes and as factory output contracts, it is less likely to purchase new machines.

Durable goods orders, which exclude transportation, probably rose 0.6% in June, following a flat performance in May. Large ticket orders, such as automobiles for civil use or aircraft, are not present in the calculation, as their value may be in a wide range. This way the index provides a more reliable information in regard to orders of durable goods.

In case orders increased at a faster pace than projected, this would have a bullish effect on the greenback. US Census Bureau is scheduled to release the official numbers at 12:30 GMT.

Singapore

Singaporean annualized manufacturing production disappointed market expectations, with the index rising 0.4% in June. Output, excluding biomedical manufacturing, increased 0.1%, while on a seasonally adjusted monthly basis, manufacturing output in the country shrank 0.1% in June, confounding experts median forecast of a 0.5% increase. The official report was released by Statistics Singapore at 5:00 GMT.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.2396. In case USD/SGD manages to breach the first resistance level at 1.2421, it will probably continue up to test 1.2439. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2464.

If USD/SGD manages to breach the first key support at 1.2378, it will probably continue to slide and test 1.2353. With this second key support broken, the movement to the downside will probably continue to 1.2335.