Dukascopy Bank Team
Dukascopy Bank SA
GBP/CAD 4H Chart: Channel Down
Comment: GBP/CAD is set for a decline both in the short and long terms. The currency pair has recently broken though a major trend-line that has been guiding the price higher since the beginning of 2013. This line now implies a major supply zone between 1.94 and 1.93, where we also have the monthly pivot point and the 200-period SMA. However, the rate is unlikely to recover this high in the nearest future, being that the upper edge of the recently formed channel is at 1.89. Accordingly, we expect a sell-off from here down to 1.78/1.77, where the Sterling is to test the lower boundary of the pattern along with the last year’s low and monthly S2. Meanwhile, the SWFX market participants are mostly bullish—70% of open positions are long.
EUR/JPY 4H Chart: Channel Up
Comment: There is a good chance EUR/JPY will soon rebound, as the currency pair is approaching the lower boundary of the recently established ascending channel. The Euro might find enough demand circa 124.84 to rally through the monthly PP and the 200-period SMA at 125.68 and at 126.12, respectively. The target will then be the upper trend-line of the channel and the monthly R1 near 129 yen. In the longer-term perspective, however, EUR/JPY is bearish, being that there is a major resistance line at the level of 130 yen that connects the highs printed since last year’s June. In the meantime, the SWFX market participants appear to be undecided, being that 54% of open positions are long and 46% are short.
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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