The US dollar has been weakening recently due to concerns over labor conditions and the possibility of an earlier Federal Reserve rate cut. Market expectations are now leaning towards a September rate cut with a 77% probability. The US unemployment rate for June exceeded the Fed’s projections, which could lead to more dovish views from policymakers.
The USD/SGD pair has dropped back to a key trendline support at 1.348, with buyers trying to defend this level. However, the daily RSI has dipped below its mid-line, suggesting a downward bias. July seasonality typically sees a decline in the US dollar, and any confirmation of rate cuts from US policymakers could further impact the pair.
A breakdown of the trendline support may indicate increased selling pressure, potentially leading to levels at 1.344 and 1.336. Resistance is expected at 1.357, where the pair has struggled in the past.