Market Outlook and Analysis (2021 WW03)
Currency Pair: GBPSGD
The main fundamentals that would move the British Pound were the Brexit negotiations and lockdowns as the country the battle against the more infectious Covid-19 UK virus strain. However, the British Pound did not show any immediate reaction to the development of the two fundamental news that could probably directly impact the country.
With regards to the Brexit agreements, the worst has been avoided. The negotiators from both sides have eventually found a trade and corporation agreement on the 24th Dec 2020.
Last Friday, British PM Boris Johnson said that there are tentative early signs that the coronavirus infections are easing in London. However, the hospitals are expecting peaks over the next week to 10days.
Moving forward, these developments could and would just cause a knee jerk reaction to the currency. Traders just have to keep in touch and updated to the situation.
GBPSGD W1 Chart – Broke below 1.83 since Sept 2018
The pound never really recovered from the plunge after the Brexit decision in 2016. It briefly broke above the 1.83 levels in 2018 before it collapsed again. Now the pair is approaching the 1.82/1.83 resistance levels level. I am expecting a strong resistance at these levels.
GBPSGD D1 Chart – Bearish Bat Formation
Spotted a Bearish Bat formation on the Daily charts, pattern completion for a short trade at around the 1.8180/1.18200. Technical indicators are not showing signs that the pair is Overbought, giving us a hint that it still has to potential to rise in the next 1-2 week towards our expected Sell zone.
Will continue to monitor the movements for signs for a potential short.
NOTE: For long term traders of GBPSGD, 182/1.83 resistance level will be very critical. Short term traders will be expecting sellers at these levels. Breaking above it could lead us to the pre-Brexit support levels at around 1.90, with 1.87 posing as another intermediate resistance level.
GBPJPY D1 Chart (Correlated Pair) – Bearish Bat Formation
Evaluating a correlated pair GBPJPY, the Daily chart is also showing a Bearish Bat Pattern completion at 141.60. Analysis is aligned with the short term potential bearish move on the GBPSGD.