Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Singapore Trade Balance for January came in at $6.303B. Forex traders can compare this to the Singapore Balance for December, reported at $5.510B. Non-Oil Exports for January rose by 0.9% monthly and collapsed by 25.0% annualized. Economists predicted a drop of 1.2% and 22.0%. Forex traders can compare this to Non-Oil Exports for December, which plunged by 2.9% monthly and 20.6% annualized.
UK Retail Sales for January are predicted to decrease by 0.3% monthly and by 5.5% annualized. Forex traders can compare this to UK Retail Sales for December, which dropped by 1.0% monthly and 5.8% annualized. UK Core Retail Sales for January are predicted at 0.0% monthly and down by 5.3% annualized. Forex traders can compare this to UK Core Retail Sales for December, which plunged by 1.1% monthly and by 6.1% annualized.
Today’s economic data, which includes more US inflation data, could show a continuation of recent trends with high inflation and slowing economic growth. Some market participants hope for a soft landing and point to the time it takes for interest rate increases to filter through the economy. They claim it will bring down inflation, but by their assessment, it also takes time for the negative economic impacts on growth to appear. January inflation data has shown hotter-than-hoped-for readings, while economic data points toward contraction.
Global inflation could rise during the first quarter of 2023, with economic growth showing declines in the second quarter. It places most currency pairs in the middle of bullish and bearish factors. The British Pound could outperform as the Bank of England had the most realistic growth and inflation expectations, allowing it to act faster than most peers.
The forecast for the GBP/SGD turned bullish after this currency pair corrected into its horizontal support area. Volatility could rise as bulls and bears square off amid a lack of short-term directional control, as shown by the flat Kijun-sen and Tenkan-sen. The Ichimoku Kinko Hyo Cloud trends lower but shows signs of stabilizing with a higher lower. Traders should also monitor the CCI following its double breakout from extreme oversold territory and above zero, followed by a reversal. This technical indicator should create a higher lower and attempt a second breakout with plenty of upside potential, which may trigger the next advance. Can bulls overrun bears and regain control of the GBP/SGD to push price action into its horizontal resistance area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000+ pips per month.
Should price action for the GBP/SGD remain inside the or breakout above the 1.5930 to 1.6040 zone the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Short Position @ 1.5985
- Take Profit Zone: 1.6240 – 1.6315
- Stop Loss Level: 1.5850
Should price action for the GBP/SGD breakdown below 1.5930 the following trade set-up is recommended:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Long Position @ 1.5850
- Take Profit Zone: 1.5675 – 1.5775
- Stop Loss Level: 1.5930
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