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Stay long USD/SGD and move up target - ANZ

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Jan 4, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Delhi) – Irene Cheung, Research Analyst at ANZ Research, suggests that they remain bullish on USD/SGD and move their target to 1.4500 with stop-loss now set at 1.4030.

    Key Quotes

    Stay bullish on USD/SGD

    USD/SGD has rebounded since late December, on the back of weakness in the CNY and EUR, two key component currencies in the S$NEER basket.

    USD/SGD is currently trading at 1.4228, close to the target of 1.4250 for the long USD/SGD trade recommendation which we initiated on 4 December 2015 (entry 1.3966, target 1.4250, stop-loss 1.3850). The trade is now 1.8% in the money (after taking account of funding cost for SGD).

    Our expectation is for broad strength in the USD as the Fed embarks on a tightening cycle, whereas we expect SGD to stay weak on growth and disinflation headwinds. We also see risk of further weakness in the CNY and EUR underpinning USD/SGD.

    With this, we move our target for USD/SGD to 1.4500 with stop loss revised up to 1.4030 to lock in a 0.5% profit for the trade. Note that our forecast is for USD/SGD to hit 1.45 by end-Q1 2016, which is also the next resistance last seen in mid-2009 if the pair has a clean break of the 1.4250 level.”
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