#014: USD/SGD SHORT Investment Opportunity
In recent days, an extremely interesting window has opened on the USD/SGD exchange rate, a pair often overlooked by retail traders but highly sensitive to Asian institutional flows. I decided to open a short position, betting on a decline in the US dollar against the Singapore dollar, for a series of structural, real, and measurable reasons.
The US dollar has begun to show clear signs of weakness. Recent macroeconomic data releases have been below expectations, particularly those related to inflation and consumption. At the same time, market expectations regarding interest rates are shifting in the opposite direction from a few months ago: the probability of a rate cut by the Fed by the end of the year is growing. Added to this is a visible decline in open interest on dollar-linked futures contracts, a clear sign that many institutional long positions are being closed. The market simply no longer believes in a strong dollar.
While the US dollar is losing momentum, the Singapore dollar is quietly but solidly strengthening. The Monetary Authority of Singapore has maintained an extremely prudent and conservative monetary policy, and capital flows into Asian markets continue to grow. The Singapore dollar has historically been seen as a regional safe-haven currency, and in an environment where the US dollar is weakening, it becomes an ideal candidate to accommodate new relative strength.
One of the most significant factors in this decision, however, is retail sentiment. Currently, over 80% of retail traders are long USD/SGD. This imbalance is striking. Typically, when the vast majority of non-professional traders are aligned on one side, the market ends up moving in the opposite direction. Institutions, on the other hand, patiently build short positions, taking advantage of excessive retail euphoria. Conventional sentiment is often the best counter-indicator.
Chart and volume analysis perfectly confirm this scenario. In recent candles, we have seen an anomalous spike above resistance, followed by a sharp rejection. This is classic behavior: institutions push the price above a key zone, trigger long retail traders' stops, raise liquidity, and then let the price fall. No news, no macro trigger: just pure manipulation. The structure now has all the characteristics to unload downwards.
The chosen take profit level is not random. It is positioned in an area historically defended by institutions, specifically between 1.27680 and 1.27720. In that range, there are volume gaps, representing the classic unloading zones where banks close positions. Furthermore, FX options show a high concentration of put strikes in that same zone, confirming that options desks are also working to defend a bearish move.
All these elements combined—macroeconomic, behavioral, volumetric, and positioning—lead to a single logical conclusion: shorting USD/SGD at this precise moment is a rational, concrete trade, and consistent with institutional flows. No gambles. No forcing. Just chance, balance and timing.
