Dukascopy Bank Team
Dukascopy Bank SA
GBP/AUD 4H Chart: Channel Up
Comment: GBP/AUD is about to test the lower boundary of the channel it has been forming since the first half of October. The base scenario is a rebound from 2.14, where we also have the monthly PP and 200-period SMA. The ensuing rally should pierce through the November 1 high and move towards the upper trend-line.
Alternatively, in case demand at 2.14 is insufficient to start a rally, the current sell-off will likely extend down to 2.11, namely the October 23 low, which is followed by 2.08 (October low). Additional ‘buy’ signal, although weak, is the fact that the market is oversold, being that 60% of open positions are short.
CAD/CHF 1H Chart: Channel Up
Comment: The bullish momentum we have been observing since mid-October is facing some difficulties at the moment. CAD/CHF has recently failed to reach the upper trend-line, and now it is struggling near the weekly R1 level. Even if this resistance is broken, the main obstacle for a long-term recovery will still be present, namely the June high at 0.7651, meaning the downside risks are increased. A breach of the rising trend-line at 0.7547 will expose the monthly PP, which is followed by the 200-hour SMA at 0.75. However, the market seems to be overcrowded with bears, as 73% of positions are short, which implies that the decline will be limited.
This overview can be used only for informational purposes. Dukascopy SA is not responsible for any losses arising from any investment based on any recommendation, forecast or other information herein contained.
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