Dukascopy Bank Team
Dukascopy Bank SA
USD/CAD 1H Chart: Channel Down
Comment: We hold a negative bias towards USD/CAD in the near term, being that the currency pair has formed a bearish channel. The pattern implies that the upside is limited by the resistance trend-line at 1.3275, while upward correction is to be expected near the lower boundary of the channel at 1.3225, which is also reinforced by the monthly PP and Nov 11 low. Once the latter level is out of the way, the 200-hour SMA at 1.3186 will become the next objective. On the other hand, if the price breaches 1.3275, the outlook will be changed to bullish, and the new target will be the Nov 6 high at 1.3315. Meanwhile, the SWFX market is somewhat oversold, as 57% of open positions are short.
USD/ZAR 4H Chart: Channel Up
Comment: There is a good chance the US Dollar will keep outperforming South African Rand in the future. The currency pair has formed a bullish channel, and most of the daily and weekly technical indicators are pointing north. USD/ZAR is expected to bottom our around 14.10 and start a new bullish wave that is to surpass the Nov 10 high.
Alternatively, in case the bears manage to push the price beneath the rising support line, the sell-off will likely extend down to the Nov 2 low and 200-period SMA at 13.70. Meanwhile, the SWFX market is overcrowded with bears, who take up three thirds of the market, and this is an additional argument in favour of a rally.
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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