The USD/SGD price tilted upwards on Friday morning as investors focused on the hawkish Fed decision. It rose to a high of 1.4200, which was the highest level since September 2022. It has risen by 36 basis points from the lowest level this month and is trading at the highest point since 2020. The pair has jumped by more than 5% this year.
Singapore dollar crash
The USD to SGD price has been in a strong bullish trend in the past few months as investors focus on the extremely hawkish Fed. On Wednesday, the Federal Reserve decided to continue hiking interest rates in a bid to fight the soaring inflation. It hiked rates by 0.75% for the third straight month.
Also, the bank signaled that it will continue hiking in the coming months. As such, the meeting was more hawkish than what analysts were expecting. Therefore, the US dollar index soared to the highest level in more than 2 decades.
Still, the Singapore dollar has been relatively weaker than other currencies. For example, the euro, pound, and Japanese yen have crashed by more than 10%. This performance is mostly because Singapore’s economy is doing much better than that of other countries. It has become the key gateway for western companies in China. Also, Singapore’s inflation is much lower than what analysts were expecting.
The daily chart has been in a strong bullish trend in the past few months. It managed to cross the important resistance level of 1.4100, which was the highest level since July 14. At the same time, the pair has risen above the 25-day and 50-day moving averages.
Oscillators like the Relative Strength Index (RSI) and the Stochastic Oscillator have tilted upwards. Therefore, the USD/SGD price will continue rising as buyers target the next key resistance level at 1.4500. A drop below the support at 1.4100 will invalidate the bullish view.