Pound / Singapore Dollar X-Rate Shifting from Bearish to Neutral
- GBP/SGD's downtrend may be coming to an end
- Pair refuses to stay below 1.7780 level
- Move up to 1.8010 now possible
The Pound-to-Singapore Dollar exchange rate has made sufficient progress higher to warrant a reassessment of the trend, says Singapore-based lender OUB.
"The strong rebound from last weeks 1.7739 low have diminished the odds for further GBP weakness," says Quek Ser Leang, an analyst at OUB.
Tuesday's strong daily close is enough now to suggest the downtrend may be ending, although full confirmation would only come from a break above the 1.7910 level.
Another key reason for the more bullish change in sentiment is the failure of the exchange rate to stay below the 1.7780 level.
"The 1.7739 low is deemed as a short-term bottom and the current movement is viewed as the start of a correction phase," says Leang.
The market is expected to correct back to as far as 1.8010, but progress above that is unlikely.
Only a break below 1.7750, meanwhile, would revive the bearish case.
A similar change in trend has happened on Cable, which has rotated higher after touching the midpoint of the previous rally at 1.32.
The failure of a high-probability bearish trade set-up further indicated a dramatic turnaround in sentiment.
Better-than-expected Services PMI reading for May were seen as fundamental reasons for the recovery.
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