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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
SGD
SGD/JPY found support in the 23.6% retracement of its Jul 20, 2021 - Jan 4, 2021 rally and last week's unexpected hawkish turn from the Monetary Authority of Singapore facilitated a rebound off that technical barrier. Bulls are wondering if the rate will challenge key resistance levels, as the rate catches breath over the past couple of days.
- Reminder that the MAS last week decided to "raise slightly" the rate of appreciation of the S$NEER policy band, while keeping its width and centre level unchanged, in response to building inflationary pressure.
- By contrast, the BoJ brushed away speculation that policy normalisation on their part might be on the horizon, with Governor Kuroda noting that the Bank has no intention to raise interest rates.
- The most recent nationwide and Tokyo CPI data released out of Japan confirmed that price growth remains anaemic, pouring cold water on earlier hawkish BoJ speculation. In Singapore, it was a beat in CPI figures that immediately preceded unscheduled policy action.
- Despite last week's upswing, SGD/JPY has struggled to move beyond the Y85.36-85.38 area, which leaves participants wondering if there is potential for that upward move to be extended, as swathes of Asia observe Lunar New Year holidays.
- The next bullish target is provided by Y85.76, which capped gains on Jan 4 and had previously remained intact since late 2015. Should the rate soar past that level to fresh multi-year highs, bulls could set their sights on a longer-term target.
- The rate has been moving within a bull channel since the early days of the pandemic and a resumption of buyer activity could threaten its upper line. The channel top kicks in at Y86.67 today.
- Conversely, support from the aforementioned Fibo retracement level has been strengthened by an ascending short-term trendline drawn off Dec 3 low. A fall through that trendline at Y84.71 would bring the 23.6% retracement of the Jul 20, 2021 - Jan 4, 2021 rally at Y84.37 into play.
Fig. 1:SGD/JPY (Fibonacci retracement & trendline support)
Source: MNI - Market News/Bloomberg
Fig. 2: SGD/JPY (bull channel & trendline support)
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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