Dukascopy Bank Team
Dukascopy Bank SA
GBP/CAD 1H Chart: Rising Wedge
Comment: GBP/CAD is highly unlikely to surpass 2.0630 in the near term, let alone a major resistance area at 2.07. Although the former is implied only by the Aug 5 high, the price is currently forming a rising wedge, meaning the bears should soon take control of the pair. Speaking of supply at 2.07, it is indicated by the upper boundary of the pattern, weekly R2, and more importantly, by the highest exchange rate level since 2008. Accordingly, the Sterling is expected to decline through the nearby supports and extend the decline down to 2.0450. The SWFX market appears to have a similar opinion: 72% of open positions are short.
GBP/JPY 1H Chart: Channel Down
Comment: Assuming that GBP/JPY is forming a bearish channel right now, there should be a small rebound in the short run. The currency pair is expected to confirm the lower boundary of the channel and rise up to 193.50 before commencing a new down-leg. The Sterling should retain the downward momentum at least until 192, where the currency is going to meet the Aug 7 low. But we must not rule out a deeper decline, down to the Jul 27 low near 191. In the meantime, a close above 193.50 will substantially increase the risk of a recovery to a major resistance level at 195.30, represented by the Aug 6 high. Meanwhile, the sentiment is neutral: 49% of traders are long and 51% 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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