GBP/AUD 4H Chart: Channel Up
Comment: Recently there have emerged concerns that GBP/AUD might be forming a rising wedge rather than a bullish channel, but the latter remains the main version. Nevertheless, we expect a strong sell-off from the current levels, being that the pair has reached the apex of an intermediate wedge and at the same time has reached the red resistance trend-line. The price is expected to decline all the way to 2.0850, where it should find a solid ground, represented by the support line and the monthly R1. On the other hand, should the supply area at 2.13 give in to the bulls, the target will be 2.1934, namely the monthly R3 level. Meanwhile, the sentiment is bearish with 61% of positions being short.
EUR/NZD 4H Chart: Rising Wedge
Comment: Despite EUR/NZD standing right at the multi-month up-trend (thick black line), it might be risky to go long just yet. The reason is the rising wedge, a pattern that suggests a reversal. The price opened sharply lower this week, and the bears could attempt to push the rate lower. A breach of 1.65 will be a strong sell signal, and the nearby supports, such as 1.65 (Jul 9 low and 200-period SMA) and 1.6043 (Jun 29 low) might not be able to stop the decline. Nevertheless, the technical indicators are mostly pointing upwards, and it might be a reasonable idea to wait for a confirmation of a recovery, which is supposed to be the Euro gaining a foothold above 1.68 (Jul 16 high).
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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