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Bullish breakout on the USD/SGD daily chart

A breakout either to the upside or to the downside could be the beginning of a pattern or a signal.

by Alexander Londoño

The US Dollar versus the Singaporean Dollar was consolidating for a few weeks, until today we finally saw a bullish breakout of the 1.3400 round number level. The consolidation that the pair was having is a resting area after a bearish correction of a much larger uptrend that cannot be seen on the current chart, courtesy of the Forex Broker ActivTrades http://www.activtrades.co.uk/. The daily chart of the USD/SGD is showing a green area where the price was oscillating between the 1.3161 as support and the 1.3400 as resistance.

The breakout could have happened in any direction and that is why it is riskier to take a position before the breakout, due to the fact that we cannot be 100% sure as to which direction the price is going to break out of. But once the breakout has been confirmed, then a breakout-and-pullback pattern may develop.

For a breakout-and-pullback pattern to be completed, there should be at least another bullish candle and then two or three bearish candles pointing to the downside and taking the price again to the 1.3400 level. Under the premise that resistance becomes support or support becomes resistance, a pullback to the 1.3400 level, could cause that level to become support.

Alexander Londono – Analyst contributor at ActivTrades.

Legal Disclaimer: Leveraged products carry a high degree of risk to your capital. The thoughts and opinions expressed here are solely those of the writer and do not necessarily reflect the view of ActivTrades Plc. This commentary is for information purposes only and should not be considered as investment advice. Any forecasts given are not a reliable indicator of future performance. The decision to act on any ideas and suggestions presented is at the sole discretion of the reader. ActivTrades PLC is authorized and regulated by the Financial Conduct Authority, FCA registration number 434413. ActivTrades PLC, 1 Thomas More Square, London, E1W 1YN, United Kingdom.


*This post was published according to the "Contributed Article Terms and Conditions"

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