SINGAPORE: Goldman Sachs & J.P. Morgan Don't Expect Further MAS Tightening
Goldman Sachs and J.P. Morgan also don't expect any further MAS tightening this year, although J.P. Morgan stays long the SGD NEER, see below.
Goldman Sachs: "The Monetary Authority of Singapore (MAS) decided to keep the slope of the SGD NEER policy band unchanged at 1.5%/annum, while keeping the width and the level at which it is centered unchanged. While this was in line with our view, the majority of forecasters and market participants appear to have expected additional tightening. Looking ahead, as the output gap turns negative and with core inflation pressures likely to moderate in 2H 2023, we do not factor in additional MAS tightening in our baseline projections. The next bi-annual meeting is in October 2023."
J.P. Morgan: "For the rest of this year, we maintain our view that the MAS will remain on hold. In previous MAS meetings which marked the end of a tightening cycle, SGD NEER has historically not trended lower in the short term after the meeting date. This implies that even if the market starts to eventually price in easing, it is unlikely that the NEER should move lower in the near term. Moreover, forwards are already pricing in the NEER moving back to the midpoint of the band in six to nine months from now, from the current 1.2% above the mid. We remain long SGD NEER."
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USDCAD TECHS: Pullback Considered Corrective
- RES 4: 1.4000 Psychological round number
- RES 3: 1.3977 High Oct 13
- RES 2: 1.3898 High Oct 14
- RES 1: 1.3814/3862 High Mar 15 / 10 and the bull trigger
- PRICE: 1.3733 @ 16:44 GMT Mar 17
- SUP 1: 1.3652 Low Mar 14
- SUP 2: 1.3562 50-day EMA
- SUP 3: 1.3515 Low Feb 22
- SUP 4: 1.3442 Low Feb 20 / 21
The recent move lower in USDCAD appears to be a correction and this is allowing a recent overbought condition to unwind. Recent gains strengthened a bullish theme. Price has cleared the Dec 16 high of 1.3705 and traded above 1.3800. Scope is seen for gains towards 1.3977, the Oct 13 high. Initial support is seen at 1.3652, Tuesday’s low. Key short-term resistance and the bull trigger is at 1.3862, the Mar 10 high.
AUDUSD TECHS: Corrective Cycle
- RES 4: 0.6865 High Feb 22
- RES 3: 0.6824 High Feb 24
- RES 2: 0.6784/87 High Mar 1 and a key resistance / 50-day EMA
- RES 1: 0.6748 High Mar 7
- PRICE: 0.6696 @ 16:43 GMT Mar 17
- SUP 1: 0.6590/47 Low Mar 15 / 61.8% of the Oct - Feb bull cycle
- SUP 2: 0.6500 Round number support
- SUP 3: 0.6425 2.00 projection of the Feb 2 - 6 - 14 price swing
- SUP 4: 0.6403 76.4% retracement of the Oct - Feb bull cycle
The AUDUSD trend condition remains bearish despite the recent recovery - a shallow correction. The Mar 7 sell-off reinforced a bearish theme. The break lower maintains the price sequence of lower lows and lower highs and price has breached key support at 0.6629, the Dec 20 low. This signals potential for weakness towards 0.6547, a Fibonacci retracement. Initial firm resistance has been defined at 0.6784, the Mar 1 high.
