USD/SGD – 1.24 threatened again after poor export data

Singapore’s export shrank in Jan vs Dec 2012 figures. M/M export came in at -1.8% vs expected +9.6%. Electronics exports dropped 5.6% Y/Y, continuing the decline seen in Dec which posted a 19.1% fall, while pharmaceutical exports worsen with a 22.9% shrinkage after December’s 11.5% slide. Overall Non Oil Domestic Exports (NODX) for January rose 0.5% y/y, but still a far cry from expectations of a 2.6% rise.

Electronic and Pharmaceutical products are 2 of the largest manufacturing arms of Singapore’s economy, as Singapore aim to differentiate herself by focusing on high-tech goods. Hence a fall in exports for both categories will severely affect the overall economic health of Singapore, and the strength of SGD in the longer run.

Hourly Chart

USD/SGD pushed above 1.24 after the data announcement, but fell back quickly to below 1.24 once again. Price was moderately bidded early morning due to JPY weakening post G20 meeting, with the USD strengthening effect spilling over slightly to all Asian currencies. Currently we’re trading close to 1.24, but signs of bullish breakout appear to be absent with previous foiled attempts still fresh in traders mind. Stochastic lines are still dangerously close to a bearish signal, with agree with the 1.24 resistance being respected in the short-term.

Weekly Chart

Longer-term Stochastic also agree with the prognosis, with price readings close to forming a top similar to readings on the hourly chart. As previous week’s wick managed to hit closer to 1.25, a push higher from 1.24 does not necessary invalidate current bear trend. A break above 1.25 is preferred for a shift in sentiment from a bearish to a bullish one from here out, while a confirmation break below 1.24 may result in acceleration to the downside.

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