Softer US PPI data fails to extend USD selling, with geopolitical risks supporting the pair at 1.28 levels.
USD/SGD consolidated around 1.28 after softer US Producer Price Index data reduced Federal Reserve rate hike expectations, though the dollar showed limited downside momentum. US Treasury yields eased, but geopolitical tensions, including fresh drone attacks on Saudi Aramco facilities, tempered appetite for further USD selling ahead of the weekend.
The pair struggled to break below recent lows despite softer inflation data, suggesting the next leg down may face challenges. Support levels are seen at 1.2770 and 1.2740, while resistance lies at 1.2830/40 and 1.2870/90. Mild bearish momentum remains intact on the daily chart, though two-way trades are likely within the recent range.
Defensive USD demand may persist due to ongoing geopolitical risks, including the potential for prolonged US naval blockades in the region. The pair’s inability to sustain downward pressure highlights near-term uncertainty.