Forex: USD/SGD – Head & Shoulders Pattern completed on daily chart?

FXstreet.com (Barcelona) - The USD/SGD traded lower for a third day in a row, finishing down 20 pips at 1.2338. The pair has declined by 81 pips over in recent days as the “risk on” theme continues in equities and commodities, while the US Dollar has been primarily weaker across the board. Economic data out of Singapore will be limited to the Unemployment Rate (Q1), which will be released at 5:00 GMT. Later on in the US Session, we will see S&P Case Shiller Index, Chicago PMI, and Consumer Confidence.

From a technical perspective, the USD/SGD appears to have completed a large head & shoulders pattern on the daily chart. This pattern spans quite a bit of time and has actually been forming since late January. It was confirmed today with the close below 1.2350 (neckline) and has measured move targets down near 1.2200. It will be important to monitor this neckline level going forward, as price should not retrace above it on a close.

Short term moving averages are in bearish set up, with price below the 9 and 20dma’s. The RSI is also in a bearish set up, trading at 37.87 (within the 60-20 zone). Initial support sits at 1.2314 (low price on April 17th), followed by 1.2276 (previous resistance, now support on daily chart). Initial resistance is at 1.2350 (h&s neckline), followed by 1.2380 (the 20dma).