Dukascopy Bank Team
Dukascopy Bank SA
CAD/JPY 4H Chart: Ascending Triangle
Comment: An ascending triangle usually indicates growing demand. However, the outlook for the Canadian Dollar is bearish, being that the pattern has been formed during a bearish market, namely at the end of the decline that has been observed since the beginning of January. Accordingly, CAD/JPY is expected to violate the up-trend at 95.23 and fall through the nearby weekly pivots. The sell-off is likely to extend to 91.76, where it is going to meet the Jan low. The currency pair may well slide even deeper, but it is going to encounter strong demand at 90.65, the minimum of 2014. On the other hand, should resistance at 95.41 give in, additional supply areas are at 95.87 and 96.74.
GBP/AUD 4H Chart: Channel Up
Comment: Although GBP/AUD is currently trading within the boundaries of a bullish channel, the downside risks are substantial. During the recent upswing the currency pair failed to reach the upper trend-line, meaning the upward momentum may be weakening. Consequently, a test of the lower trend-line at 1.9820 is critical. The base case scenario is a rebound from support toward 2.0389. A breach of 1.9820 is an alternative with a lower but nonetheless high probability. In this case GBP/AUD will likely keep sliding south until it reaches 1.91, where the pair will have a good chance of stabilising, considering presence of the monthly pivot point, weekly S2 and long-term moving average.
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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