The GBP/SGD pair rose initially during the course of the day, breaking above the 1.90 level on Thursday. While this is somewhat of an exotic pair, as most of you will trade the British pound against the Singapore dollar, they are two fairly well traded currencies in general, so I believe that longer-term traders will continue to be attracted to it. Breaking above the 1.98 level should send this market looking for the 2 handle, which we did try to get to during the day as well. I think that recently we may have formed a bit of an inverse head and shoulders, so if we can break above the top of the range for the Thursday session, you can measure the entire pattern and form a bit of a target based upon that.
Measuring the Target
The inverse head and shoulders is roughly 12 handles, so having said that I think if we can break above the top of the range, we are probably looking for a move all the way to the 2.12 handle. That’s an area that has previously seen a lot of interest, and I think that there are a few major areas between here and there that could give us a little bit of a headache, but ultimately I think it’s a fairly safe bet to try to aim for the 2.05 handle. It looks as if we are trying to reverse the trend, and part of this could be due to the fact that fears are a little bit subsided when it comes to the idea of the United Kingdom leaving the European Union, as the markets have certainly overestimated the trouble. Also, money is starting to flow from Asia, so it does make sense that it would head to the United Kingdom. Keep in mind that the Singapore dollar is considered to be a bit of a safety currency when it comes to Asia, so this could be a sign of potential volatility and positivity and some of the riskier markets. I am a buyer on a break above the highs from the session on Thursday