SGDGBP runs into sellers again around 0.5762
Singapore Dollar/British Pound (SGDGBP) Technical Analysis Report for May 29, 2020 | by Techniquant Editorial Team
SGDGBP finished the month 1.87% higher at 0.5732 after gaining 8 pips (0.14%) today on high volume. Closing within the prior day's range, prices failed to decisively move beyond the previous day's trading range.
Daily Candlestick Chart (SGDGBP as at May 29, 2020):
Friday's trading range has been 51 pips (0.89%), that's above the last trading month's daily average range of 40 pips. Things look different on the weekly timeframe, where the market's trading range of the last week has been slightly below the market's average weekly trading range. The longer-term, monthly volatility is currently slightly lower than usual for SGDGBP.
In a volatile session, prices traded above the prior day's high as well as below the previous day's low, forming a bullish Outside Bar. Additionally, two candlestick patterns are matching today's price action, the Bullish High-Wave Candle and the Bullish Spinning Top which are both known as bullish patterns. The last time a Bullish High-Wave Candle showed up on March 19th, SGDGBP actually lost -1.27% on the following trading day.
Prices are trading close to the key technical support level at 0.5703 (S1). After having been unable to move above 0.5756 in the prior session, the pair ran into sellers again around the same price level today, failing to move higher than 0.5762.
Although still in a long-term uptrend, the short and medium-term trends both turned bearish already. With its 50-day moving average crossing below its 200-day moving average, the FX pair has entered a so-called "Death Cross" for the first time since May 19th. Showing increasing downward momentum in the short and medium-term the "Death Cross" is known to indicate a potential bear market on the horizon.
Buying could speed up should prices move above the close-by swing high at 0.5766 where further buy stops might get activated. Selling could accelerate should prices move below the nearby swing low at 0.5711 where further sell stops might get triggered.
Among the seven market conditions that our pattern recognition engine identified today, the statistics for the Technical Indicators based market condition "Death Cross" stand out. While it is usually interpreted as bearish, it has actually shown to be bullish for SGD/GBP. Out of 8 times, SGDGBP closed higher 62.50% of the time on the next trading day after the market condition occurred. The optimal exit for swing trading this condition on the long side has been after 10 trading days, showing a win rate of 75.00% with an average market move of 0.42%.