USD / SGD Price forecast Q4 2020: Retention of restrictions from 2015

The US dollar changed by almost 2 Singapore dollars in the early 1990s, but since then the SGD has become increasingly popular against the US dollar, sending this pair lower. One reason for this is the growth of the Chinese economy over the last three decades, and the SGD has benefited from this, as the Singapore economy is closely linked to the Chinese economy, pushing the SGD upwards and sending the USD / SGD lower.

Currently USD / SGD Price: $

Latest price changes in USD / SGD

Period Change ($) Change%
30 dana +0,007 +0,05%
6 months -0,07 -5,1%
1 year -0,015 -1,1%
5 years -0,05 -3,6%
Since 2000 -0,33 -24,1%

 

There was a withdrawal in the late ’90s and early 2000s, so the pair rose from 1.40 to 1.85, in part because of the Japanese economic crisis at the time. However, the downward trend continued again, and this pair remained bearish until 2010, which followed a resumption of growth until 2015. However, since then USD / SGD has been trading sideways, and after the growth of SGD in recent months, this pair has headed towards the bottom of the range. But the SMA 100 seems to be holding, so the range is likely to continue, offering some good long-term trading opportunities.

USD / SGD prognoza: Q4 2020 USD / SGD forecast: 1 year USD / SGD forecast: 3 years
Price: $ 1.40

Price drivers: COVID-19,  American Elections, Technical Data,

 

Price: 1.45-46 USD

Price drivers: After the US elections, the US-China trade war, Technicals, FED

 

Price: 64 USD – 

Price drivers: US and Singapore basics, Chinese military progress in Singapore, global politics

USD / SGD live chart

SGD benefits from China’s economic boom  

In addition to the expansion of the Chinese economy, which has helped Singapore’s economy, SGD is somewhat correlated with the Chinese yuan CNY, and therefore benefits from it, as seen in recent months as China has left the coronavirus behind as the pandemic continues to rage in The United States. But the benefits go far back, and probably further into the future.

The Chinese economy shifted from the G20 outsider to second place globally in the 1990s. That’s one of the main reasons for the 30-year bear trend in this pair. The Chinese economy will continue to grow, and Singapore’s economy will continue to benefit from it, which in turn means the Singapore dollar will continue to rise, sending the USD / SGD lower. However, the trade war between the US and China complicates the situation a bit, as it will slow down China’s economic growth, but overall, this is a long-term minus for this pair.

Central Bank of Singapore and COVID-19

The coronavirus has hit all economies around the world this year, and Singapore’s economy is expected to shrink by about 1-4% in 2020, due to COVID-19 measures. CPI inflation is also expected, which will average between -1% and 0% this year. However, China and East Asia now appear to have left the coronavirus pandemic behind, and the economic situation has improved significantly, both in China and in Singapore.

SGD lost about 12 cents during Q1 as Singapore and China set limits to fight the virus, and USD / SGD rose from 1.3450 to 1.4650. But then the virus began to spread through Europe and the US, and the USD / SGD reversed and has remained bearish ever since. Extreme measures taken by the Monetary Authority of Singapore (MAS), which acts as the central bank, have also helped. They reduced the slope (interest rate) to 0%, from about 1.75% earlier this year, and introduced $ 100 billion in aid for the coronavirus. So this pair is still bearish, even though it is approaching the bottom of the range.

200 SMA added resistance above 1.45

As mentioned above, the USD / SGD traded around 2 in the early 1990s, but then moved down again as China began to accelerate, and by 1997 20 SMA (gray) was resisting on the monthly chart. This showed that the pace of the fall was quite strong. Over the next 5 years, we recorded higher growth, above 1.85, as the Japanese economic crisis frightened East Asian markets and 20 SMAs turned into support. The bearish trend continued in 2002, and this time 50 SMA (yellow) came into play as resistance during the retreat. USD / SGD withdrew again more from 2012 to 2015, but has since traded sideways, with 100 SMA (green) turning into support, while the resistance zone, around 1.45, is at the top.

The MAs turned into resistance in September

Speaking of support and resistance, they can be clearly seen on the weekly chart as well as the range. The range is not strict, as there have been breaks above and below, but the price continues to bounce up and down in the area between the lines. We can see that during the crash in Q1, when the coronavirus broke out in China, the price became bearish since March. The MAs have turned into resistance on the weekly chart, and the price is approaching the bottom of the range, where we could go long on this pair in a few weeks, after the U.S. election is over and the USD is back on track.

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