Poised For Worst Week Since September

Spot USD/SGD is higher, gains accelerating as the session goes on, the pair last up 11 pips at 1.3386. SGD is on track for its worst week since September, USD/SGD is so far up 96 pips this week (0.72%).

• SGD is one of the currencies on the Asia EM matrix that is most vulnerable to USD upside. SGD NEER is highly sensitive to USD movements due to the weight of the greenback in the NEER basket, currently SGD is just above the mid-point of the policy band which could indicate further downside is possible.
• USD/SGD crossed above its 50-day moving average in late Jan, and now has the 100-day moving average in its sights – currently at 1.3433. Bulls need a break above 1.34 which acted as a cap through December to confirm an upside break. After the 100-day moving average the pair runs into significant resistance is at 1.3509 the 23.6% retracement of the cycle move lower. Support levels are thin with the rate not touching these levels since mid-2018, we coasted 1.3216 through late January, and the 2021 low sits at 1.3157.
• Market looks ahead to the December retail sales data, headline retail sales are expected to decline 2.2% Y/Y after a 1.9% drop in November. Ex autos are expected to fall 2.4%.