Singapore Dollar Eases on Downbeat Data

Currency exchange rate board of multiple currencies

Official data showed that Singapore's Retail Sales dropped 13.3% on year in March (-16.8% expected, -8.4% in February), the biggest decline since 1998.

Market chart Singapore retail sales over a 4 month period. Published in May 2020 Source: Bloomberg Finance
Source: Bloomberg

Singapore's Official Purchasing Managers Index (PMI) fell to 44.7 in April (40.0 expected) from 45.4 in March.

Meanwhile, the IHS Markit Singapore PMI plunged to 28.1 in April from 33.3 in March.

Histogram showing how the Singapore dollar eases on downbeat . Published in May 2020 Source: Bloomberg
Source: Bloomberg, IHS Markit

Research firm IHS Markit commented: "The 'circuit breaker', which resulted in widespread closures of non-essential businesses as the government acted to stem the spread of the coronavirus disease 2019 (COVID-19), was the key factor causing activity to fall at a survey-record rate."

The city state has recorded over 19,000 coronavirus case with a related death toll of 18 (death rate less than 0.1%). Minister for National Development Lawrence Wong announced that key coronavirus-related restrictions will remain in force until June 1, though some lockdown measures will be easing gradually. He added: "Remember the fight is far from over." 

Following a series of downbeat data, the Singapore dollar has pared some of the strength it has recently shown against the U.S. dollar.

On an Intraday 30-Minutes Chart, USD/SGD has located a Key Support at 1.4145.
Market chart demonstrating Singapore Dollar Eases On Downbeat Data. Published in May 2020 by
Source: GAIN Capital, TradingView

It is currently trading at levels above the ascending 20-period moving average, which stands above the 50-period one.

The Technical Configuration still favors a Bullish Bias.

Unless the key support at 1.4145 is breached, USD/SGD is expected to encounter Overhead Resistance at 1.4185 and 1.4205 (around the high of May 4).

However, a return to 1.4145 would make the pair seek support at 1.4130 on the downside.

Related tags: Forex Dollar

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