28/04/2016 | USDSGD - Post FOMC Update

Highlights

US central bank recognizes improving global economic conditions

• Bearish trend strongly intact
• Bank of Japan leaves policy unchanged
• USD more sensitive to US economic data

So, in line with what we previously expected about Janet Yellen recognizing that there are signs of stabilization in the global economy as well as an oil price recovery so far, the Fed has shifted the focus away from external developments, to economic health indicators back in the US. The upcoming economic indicators, especially the NFP report due next Friday will probably hold more weight now.

The USDSGD post FOMC managed to surge higher on less dovish remarks, but lost all its gains to end with a bearish signal on the 4hr charts, in line with the current USDSGD downtrend. The downtrend remains firmly intact, with 1.3150 still providing the next major support. 

The BoJ left its monetary policy unchanged today, hurting the US dollar, and the USDSGD as a result. The USDSGD traded to a daily low of 1.3415 after the announcement, adding more momentum for a bearish US dollar this week.
Advanced GDP estimates from the US at 8:30pm today may allow the US dollar to recover moderately, but unlikely to provide much upside as the effect of BoJ is likely to last until the end of the week. Otherwise, a break below last week's low will probably see USDSGD sink to 1.3280 or lower.

Cheers!

FXGFM