USD/SGD rose overnight after US–Iran ceasefire talks stalled. Chart signals show weaker downside momentum and a higher RSI.
Resistance is seen at 1.2750/60, then 1.28, and 1.2850. Support sits at 1.2670, with further levels at 1.2620 and 1.2590 if 1.2670 breaks.
From 1 March to before the ceasefire announcement, the Singapore dollar held up better than several Asian peers, including JPY, KRW, THB, PHP and MYR. This performance is framed as defensive behaviour during a period of geopolitical stress.
If uncertainty stays elevated, demand may remain stronger for lower-beta Asian currencies. If tensions ease and markets shift back towards pro-cyclical, trade-sensitive currencies, especially those linked to tech and global growth, the Singapore dollar may lag peers such as MYR, KRW, AUD and TWD.
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With the US-Iran ceasefire talks stalling, we see the USD/SGD pair moving higher. Technical signs suggest the dollar may strengthen further against the Singapore dollar in the immediate term. The key level to watch is the 1.2750 resistance.
Given this, traders could consider short-term call options on USD/SGD with a strike price near 1.2750. This position would benefit if geopolitical uncertainty continues to push the pair upwards in the coming days. The strategy allows for participation in the upside while defining the risk.
However, we must remember that the Singapore dollar has been acting as a defensive shelter in the region. Recent data showing Singapore’s core inflation at 2.8%, slightly below expectations, gives the central bank less urgency to pursue a stronger currency. This sets the stage for the SGD to underperform once risk appetite returns.
We are seeing fundamentals improve for higher-risk currencies, with South Korea’s semiconductor exports up 12% in March and iron ore prices recovering to over $120 a tonne, which supports the Australian dollar. These economies are poised to benefit more directly from a global rebound. This makes their currencies attractive once the market shifts its focus away from safety.
The primary trade will be to position for the Singapore dollar to weaken against these peers when geopolitical tensions finally ease. This means looking at derivatives that go long on pairs like the Australian dollar versus the Singapore dollar (AUD/SGD) or the Korean won versus the Singapore dollar (KRW/SGD). The timing for this trade will be critical and depends entirely on a clear de-escalation.
We saw a similar pattern in the third quarter of 2025 when a temporary easing of tensions caused the SGD to lag the KRW significantly. History suggests that when the market moves from “defence” to “rebound,” these higher-beta currencies can catch up very quickly. Therefore, the key is to watch for the signal that the defensive trade is unwinding.
