Dukascopy Bank Team
Dukascopy Bank SA
EUR/CHF 4H Chart: Falling Wedge
Comment: Last week, EUR/CHF exited the boundaries of the rising wedge that has been forming in the daily chart for 14 months. Accordingly, our overall bias is negative. In the shorter-term perspective, however, there will be an opportunity for a strong rebound, considering that at the moment the pair is trading between two bearish converging trend-lines, meaning the current downward momentum is dying off. Nevertheless, the upside is to be limited, presumably by the trend-line that has recently been breached. At the moment, the trend-line is at 1.0965, but by the time EUR/CHF breaks out of the falling wedge, it is likely to join forces with the long-term SMA at 1.10 francs.
GBP/CAD 1H Chart: Falling Wedge
Comment: GBP/CAD is trading right at the apex of the falling wedge, implying the risks are heavily skewed to the upside. If resistance 1.8780 is broken, the first target will be the weekly pivot point at 1.9070, while in the long run we will expect the rally to extend towards 1.95, namely the major broken trend-line. However, the recovery might be stopped a little earlier by some 100-150 pips either by the 200-hour SMA or the weekly R1. Meanwhile, the bearish target is the weekly S1 at 1.8415, followed by the April low at 1.8150. An argument against a rally, however, is the sentiment in the market: 69% of the SWFX market participants are currently holding long positions, meaning the Sterling is overbought.
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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