Dukascopy Bank Team
Dukascopy Bank SA
Comment: For the past two months the currency pair has been distinctly bullish, and there are good arguments in favour of the Euro appreciating further. The main reasons for a positive outlook are that the indicators are mostly pointing upwards, and there is a well-defined upward-sloping channel.
However, EUR/NZD is facing a critical resistance area around 1.6278, represented by the upper edge of the pattern and some of the late-2014 highs. This implies weakness in the short-term, but can also turn out to be the longer-term top. These concerns are reflected in the sentiment of the market participants. Right now 70% of open positions are short.
USD/DKK 4H Chart: Channel Down
Comment: Although USD/DKK is currently trading within the boundaries of a high-quality bearish channel, we should be wary of the fact that the US Dollar is currently undergoing a downward correction. This significantly increases the upside risks.
Still, there is some downward potential left. The 38.2% Fibonacci retracement of the May 2014—Mar 2015 rally is at 6.44, and we might descend down to the 50% retracement at 6.23 before the upper boundary of the patter is broken. In the meantime, the SWFX traders appear to be confident that the Greenback is going to outperform the Danish Krone: as many as 74% of open positions are long.
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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