Forex Market: USD/SGD forecast for Monday

During Friday’s trading session USD/SGD traded within the range of 1.2397-1.2423 and closed at 1.2421, gaining 0.07% for the day and 0.08% on a weekly basis.

Fundamental view

United States

The index of pending home sales in the United States probably rose 0.4% during June compared to May, according to the median forecast by experts, following another 6.1% increase in the prior month.

When a sales contract is accepted for a property, it is recorded as a pending home sale. As an indicator the index provides information on the number of future home sales, which are in the pipeline. It gathers data from real estate agents and brokers at the point of a sale of contract and is currently the most accurate indicator regarding US housing sector. It samples over 20% of the market. In addition, over 80% of pending house sales are converted to actual home sales within 2 or 3 months. Therefore, this index has a predictive value about actual home sales.

Although there are some cancellations, there are not enough for the data to be skewed one way or another. The base value of the index is equal to 100, while the base year is 2001, when there has been a high level of home sales.

The National Association of Realtor’s (NAR) will release the official index value at 14:00 GMT on Monday (July 28th). In case pending home sales increased more than anticipated, this would have a bullish effect on the greenback.

Singapore

July 28th is the Hari Raya Puasa, or “Day of Celebration”, which is an important religious festival, celebrated by the Muslims in Singapore. This festival signifies the end of Ramadan, which is a one-month fasting. It is a time of forgiveness within the Muslim community and a time for strengthening of bonds between relatives and friends. New clothes, decorated houses and exchange of invitations between friends and relatives commemorate the Hari Raya Puasa. Markets are to remain closed.

Technical view

According to Binary Tribune’s daily analysis, the central pivot point for the pair is at 1.2414. In case USD/SGD manages to breach the first resistance level at 1.2430, it will probably continue up to test 1.2440. In case the second key resistance is broken, the pair will probably attempt to advance to 1.2456.

If USD/SGD manages to breach the first key support at 1.2404, it will probably continue to slide and test 1.2388. With this second key support broken, the movement to the downside will probably continue to 1.2378.