Price on the daily price action chart of the USDSGD has begun winding up tighter and tighter after forming a Bearish Engulfing Bar (BEEB). The BEEB is rejecting a key daily resistance that has been a proven level on both the short and longer term. Price has been unable to break the BEEB low and make a substantial move lower because the low of the engulfing bar is sitting on a minor support level.
The daily chart below of the USDSGD shows how price has formed back to back inside bars (IB’s) after the BEEB. The longer the winding up goes on, normally the stronger the breakout is when it eventually occurs. If price can breakout of the BEEB low and confirm the engulfing bar, the next support level comes in around 1.2480. If price breaks out higher and through the heavy resistance, then that resistance would become a price flip area and look to act as support.
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