USD/SGD slides after impressive export data from Singapore

The USD/SGD pair declined slightly as investors reacted to the latest trade numbers from Singapore. The pair is trading at 1.3698, which is slightly below last week’s high of 1.3756.

Singapore trade improves

Singapore recorded improved trade numbers in July, continuing a trend that started a month earlier. According to Enterprise Singapore, non-oil domestic exports increased by 6% in July after expanding by 13.9% in the previous month. This increase was better than the 4.30% that analysts were expecting.

The robust export industry was led by non-electronic products like non-monetary gold and specialised machinery. Electronics like disk media products also did well. In total, NODX increased to S$14.1 billion from the previous month’s S$14.0 billion. Still, this was 7.9% lower than what the country exported in the same month in 2019.

At the same time, Non-Oil Retained Imports of Intermediate Goods (NORI) increased by S$1.1 billion to S$7.2 billion.

Singapore’s exports to its top ten markets increased, with most increases being in the US, South Korea, and Taiwan. Exports to Indonesia, Thailand, and China declined in July. The biggest contributor to US exports was a 213% increase in non-monetary gold and disk media products.

Oil domestic exports declined by 50.9% in July, mostly because of lower prices. This followed a 60.8% contraction in June. According to the bureau, this decline was mostly because of 59.3% lower exports to Indonesia, 87.8% decline in Europe, and 33.4% decline in Malaysia.

These numbers show that the Singapore economy is making strong progress after recording a 13.2% contraction in the second quarter. Indeed, the statistics bureau expects the economy to contract by 5% this year, which is slightly better than the previous guidance of a 7% decline. Another data showed that retail sales increased by 51.1% month-on-month in July. Excluding motor vehicles, the sales increased by 43.1%.

USD/SGD technical outlook

The daily chart shows that the USD/SGD pair rose to a YTD high of 1.4647 in March this year. The pair is currently trading at 1.3697, which is the lowest level since February this year. The price is below the 50-day and 100-day exponential moving averages. It is also along the 78.6% Fibonacci retracement level. This retracement connects the lowest and highest levels this year.

The USD/SGD pair is also below the descending trend line that is shown in black while the RSI is slightly above the oversold level. Therefore, the pair is likely to continue falling as bears target the next resistance level at 1.3600.