OCBC strategists Sim Moh Siong and Christopher Wong expect USD/SGD to rebound after what they describe as a relief move lower rather than a reversal. They say headlines on geopolitics remain changeable, so USD/SGD may trade in both directions in the near term.
They warn that any renewed rise in oil prices, linked to US–Iran tensions, could lift concerns about inflation, growth and risk sentiment. They add that further escalation could push USD/SGD higher if the US dollar firms, US Treasury yields rise, or regional sentiment weakens, while noting the Singapore dollar may still hold up better than some Asian currencies.
USD/SGD was last at 1.2765. They report that daily momentum and RSI do not show a clear direction.
They place resistance at 1.2850, based on the 200-day moving average and the 23.6% Fibonacci level. They place support at 1.2720, the 61.8% Fibonacci retracement of the 2026 low to high, and at 1.2680.
We see the recent drop in USD/SGD as a temporary relief move rather than a true reversal of the trend. The pair has already started to rebound, suggesting that underlying upward pressures remain. Traders should be cautious about assuming the US dollar’s strength is over for now.
The main risk to watch is the fluid geopolitical situation, which could easily send oil prices higher. Brent crude futures have already shown sensitivity, climbing back above $92 a barrel this week amid renewed tensions. Any significant escalation between the US and Iran could revive inflation and growth concerns, benefiting the US dollar.
A spike in inflation worries would likely push US Treasury yields up, and we have already seen the 10-year yield firm up around 4.65% on these concerns. This environment naturally adds upward pressure to USD/SGD, as the Singapore dollar is not immune to a broadly stronger greenback or weaker regional risk sentiment.
However, the Singapore dollar should continue to show resilience compared to other Asian currencies. Looking back at the regional currency sell-off in the third quarter of 2025, the Singapore dollar held its ground better than most. This strength suggests that while USD/SGD may rise, its gains could be limited.
For derivative traders, this points towards strategies that benefit from a defined range in the coming weeks. With significant resistance noted around the 1.2850 level, selling call options or setting up bear call spreads as the pair approaches this ceiling could be a viable strategy. This aligns with the bias to sell into rallies.
Conversely, the support levels around 1.2720 and 1.2680 present potential opportunities for short-term bullish strategies, like buying calls or setting up bull put spreads. Given that momentum indicators are neutral, traders should be prepared for choppy, two-way price action without a clear trend emerging just yet.
