CHF/JPY 1H Chart: Rising Wedge
Comment: The Swiss Franc was rapidly appreciating versus the Japanese Yen during five trading days ended July 4 when the pair unexpectedly halted its winning streak and plunged below the lower limit of the 81-bar long rising wedge pattern it entered late June.
Now CHF/JPY is on the brink of a deepening sell-off as a bearish breakout from a trading pattern usually puts a heavy selling pressure on an instrument. If this materializes, the currency couple may dive beneath 114.27/1 (four-hour S1, S2; daily S1) that may open the way towards the next support zone at 114.14/05 (four-hour S3; 200-hour SMA; daily S2).
NZD/CAD 1H Chart: Descending Triangle
Comment: NZD/CAD has been constantly attempting to exit a 253-bar long descending triangle pattern that has been blocking the pair’s moves since mid-June. Up to now, the currency pair has unsuccessfully tried to breach the pattern’s boundaries for four times but given that the apex will be reached in a several hours, we may expect NZD/CAD to exit the formation in earnest before long. However, the direction of the looming breakout seems unclear, with the SWFX data showing the proportions of long and short positions to the total numbers of orders are almost equal. Technical indicators shed some light, sending ‘sell’ signals for short and medium terms.
EUR/CHF 1H Chart: Falling Wedge
Comment: It seems a sharp rally of the Euro against the Swiss Franc that took place a day earlier exhausted the pair’s potential at a time when the instrument needed a bullish impulse to settle above the upper trend-line of a falling wedge pattern.
Currently, the pair is headed towards the pattern’s upper trend-line but a return to the formation still seems unlikely given a strong support area at 1.2156/5 ( 200-hour SMA and daily PP) as well as bullishness on the SWFX – more than two-thirds of market players hold long positions. Technical data also props up this view in the medium-term but points to a possible weakness in the longer period.
EUR/GBP 1H Chart: Channel Down
Comment: EUR/GBP is prolonging its three-month decline that has already pushed the pair to a two-year low of 0.7925 that lies on the lower trend-line of the latest formation shaped by the instrument– channel down pattern.
Now the pair is sitting at the recent low and considering the SWFX sentiment – 67% of all orders are placed to sell the currency couple– EUR/GBP may hit fresh record lows in the hours to come. Supporting this, technical indicators send a bearish signal for short-term but are neutral for a longer term.