USD/SGD continued to trade modestly softer as USD strength eased while JPY, CNH and risk sentiments found support. USD/SGD was last seen at 1.3658, OCBC's FX analyst Christopher Wong notes. The analyst expects the Monetary Authority of Singapore (MAS) to ease policy at the upcoming Monetary Policy Commitee (MPC) meeting.

Price action still shows a potential rising wedge

"Daily momentum is mild bearish while RSI fell. Price action still shows a potential rising wedge pattern in the making. This can be associated with a bearish reversal. Bearish divergence observed on RSI. Near term risks continued to suggest downside bias though conviction level is not strong. Support at 1.3645 (21 DMA). Resistance at 1.3760 levels, 1.38."

"The focus next is on NODX (Friday), CPI (next Thursday) and upcoming MAS MPC (no later than 31 Jan). We are looking for MAS to ease policy at the upcoming MPC by reducing the policy slope slightly but still maintain a mild appreciation stance."

"Given that the disinflation journey has made good progress, we believe MAS now has optionality to ease especially if it takes on a pre-emptive stance in the face of policy transmission lag. S$NEER was last at 0.59% above model-implied mid."