Singapore’s GDP data was made public and it showed a worse than expected result. Singapore GDP q/q came in at -3.4% as against the 3.8% growth recorded in the previous quarter. A consensus figure of 0.5% was expected by the market. Annual Singapore GDP came in at 0.1% as against the 1.1% growth witnessed in the previous release.
The annual GDP growth of 0.1% is not encouraging, and the worsening figures are a sign that manufacturing in Singapore has declined. This is also fanning the embers of fears of global economic slowdown, which is making the G10 central banks consider a series of coordinated rate cuts. Analysts at TD Ameritrade are not expecting a recovery anytime soon, as Singapore trade, exports and PMI data are not encouraging. The tech sector is also facing a lot of downward pressure. These factors may force the government to scale down its GDP projections of 1.5% – 2.5% growth and may set the stage for an interest rate cut in Q4 2019.
The Singapore Dollar is taking the heat as the USD/SGD pair has made a 30-pip upside move and is presently testing the R2 resistance at 1.36043.
Intraday bias continued to remain slightly bullish, though there may be a stalling of price as a pinbar forms at the R2 pivot. A close above the R2 pivot will see price testing key resistance levels at the R3 pivot (1.3625) and beyond that may also approach 1.3670. These are price areas where there are key Fibonacci level as well as previous levels of support/resistance.
To the downside, a close below the recently broken support of 1.3585 will open the door for the USD/SGD to approach 1.3564 and 1.3545 (central pivot and S1 daily pivot respectively).Don’t miss a beat! Follow us on Twitter.
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