USD/SGD finds resistance at 1.33 after strong Singapore data
- The USD/SGD price declined today after the strong economic numbers from Singapore.
- Singapore's industrial production rose by 14.3% in December.
- The pair also fell ahead of the Fed interest rate decision.
The USD/SGD price turned lower today after the relatively strong economic numbers from Singapore. It is trading at 1.3256, which is relatively lower than the intraday high of 1.3300.
Singapore strong economic numbers
Singapore has released relatively stronger economic numbers in the past few weeks. Yesterday, data by the country showed that consumer prices rose from -0.1% in November to 0.0% in December. This performance was better than the median estimate of -0.1%.
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And today, data by the statistics agency said that industrial production increased by 2.4% in December. While this was lower than the November increase of 7.5%, it was better than the median estimate of -0.6%. In total, the production rose by 14.3% from the same period in 2019.
This performance was mostly due to the strong manufacturing sector and electronics. The pharmaceutical factor lagged. These numbers mean that the economy continued its expansion in the fourth quarter. In a note, analysts at ING said:
“Sustaining this performance in 2021 hinges on the pandemic abating and a continued positive semiconductor cycle. We’re not expecting much in terms of policy support.”
Fed decision ahead
Later this week, the USD/SGD will react to the Singapore Q4 unemployment rate and bank lending data.
Also, from the United States, the pair will react to the Fed interest rate decision that will come out tomorrow evening. Economists believe that the Fed will not tweak its interest rate policy this time. Instead, the meeting will just set the tone about future actions.
Further, forex investorswill react to the US GDP data that will come out on Thursday. Analysts expect the data to show that the economy expanded in the fourth quarter helped by robust consumer spending. On Friday, the USD/SGD will react to the important personal spending and income numbers.
USD/SGD technical outlook
On the four-hour chart we see that the USD/SGD price has found a strong resistance at the 1.3300 level. Also, the pair is in consolidation mode as evidenced by the 25-day exponential moving average, Relative Strength Index (RSI), and the MACD.
Therefore, as with analysts at UOB, I suspect that the pair will remain between the support of 1.3160 and the resistance at 1.3320, respectively.