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USDSGD Potential Head and Shoulders Pattern

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I’m starting today’s commentary with a pair that I don’t talk about often. Like most USD pairs, USDSGD has been in an uptrend for some time now. In fact you have to go all the way back to June of 2014 to find a period of time when the pair wasn’t trending up.

The pair’s rally has been an aggressive one, which often leads to a sharp move in the opposite direction. The bearish pin bar that formed last week on the weekly chart may be an indication of things to come.

To further the suspicion that the pair may have formed a top, the 4 hour chart appears to be forming a head and shoulders pattern. At the moment this pattern is not confirmed. A 4 hour close below 1.3308 is needed to confirm the pattern and set up a potential short opportunity.

As a side note, the 1.3308 level is also being respected on a 1 hour basis. Therefore the more aggressive trader could use a 1 hour close below neckline support as confirmation of the head and shoulders pattern.

Summary: Wait for a 1 hour (aggressive) or 4 hour (conservative) close below 1.3308 as confirmation of the head and shoulders pattern. Key support comes in at the year-open gap of 1.3243. A measured objective can be found at 1.3200.

USDSGD daily forex chart

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