EUR/SGD 1H Chart: Pennant
- The common European currency is advancing against the Singapore Dollar in a little pennant pattern that formed in the result of announcement of information on the US CPI last Friday.
- Since the pair is moving in a continuation pattern, then breakout is expected to occur in the northern direction.
- The length of the subsequent rise might amount to 50-60 basis points, which coincides with the updated weekly R1 located at the 1.6155 level.
- This scenario is additionally supported by the pressure exercised by the 20- and 200-hour SMAs as well as the 55- and 100-hour SMAs plus the weekly PP at 1.6052.
- Moreover, 71% of traders hold bullish positions on the given currency pair, while 65% of pending orders in 100-pips range are set to buy.
EUR/SGD is trading in two patterns simultaneously. The more senior formation is a rather chaotic channel up, while the junior one—a descending triangle. The latter seems to have reached its maturity, thus suggesting that a breakout may be due in the upcoming hours.
Descending triangle is generally a bearish pattern that should guide the rate towards the weekly S1 at 1.6033. This scenario is likewise supported by daily indicators.
Given that the 55-, 100– and 200-hour SMAs are located just above the current price level, a breakout north is unlikely. However, if this situation is to occur, the next important resistance is set by the weekly R1 at 1.6253.