EUR/CAD 1H Chart: Ascending Triangle

EUR/JPY 4H Chart: Triangle

Comment: Our bias towards the Euro against the Yen is strongly negative. EUR/JPY is right at the apex of the consolidation pattern it has formed after a decline. Accordingly, we expect a break-out to the downside. At the same time, a majority of the technical indicators in all three relevant time-frames is giving a distinct ‘sell’ signal. Once below 127.70, the initial target will be the monthly S2 at 126.80, while the main demand area is seen at 126.12, represented by the last year’s low. The outlook will be changed if the price manages to rise above the monthly S1 level at 128.60. The rally will then likely extend up to 130.50, where the weekly R1 merges with the falling resistance line.

EUR/CAD 1H Chart: Ascending Triangle

Comment: The latest rally is having trouble surpassing supply at 1.5526. Nevertheless, the near-term risks are still considered to be skewed to the upside, being that while the new peaks are at the same level as the old peaks, the new lows are higher than the previous ones. This implies that demand is building up, and there is a decent chance of EUR/CAD rebounding from 1.5420 and subsequently piercing through 1.5526. However, this will be insufficient for the pair to confirm its long-term intentions. The main obstacle, namely the 2014 and 2015 highs, is still in the way. The rate will first need to surpass 1.5585/64 area before we are confident that the Euro is able to sustain upward momentum.

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