Dukascopy Bank Team
Dukascopy Bank SA
GBP/CAD 4H Chart: Double Bottom
Comment: Although from a fundamental perspective the Sterling appears to be fairly weak, the technicals are suggesting the time has come for the British Pound to outperform its peers. Specifically in the GBP/CAD pair, we see emergence of a double bottom pattern that implies a reversal of the recent sell-off. At the same time, we must note we are still rather far away from the neck-line, which needs to be broken to confirm its intention to reach the Feb high at 1.9559. Meanwhile, the technical indicators, with the exception of the daily ones, are mostly pointing upwards, and the SWFX sentiment is strongly positive, with three fourths of all positions being long.
EUR/GBP 4H Chart: Double Top
Comment: EUR/GBP prepares to launch an attack on a strong support level at 0.7220. This is the neck-line of the recently formed double top pattern, and it is reinforced by the monthly pivot. If the currency pair succeeds, the price may afterwards fall towards the Mar low near 0.70, though there is also the monthly S1 nearby at 0.7043 that can potentially stop a decline.
Alternatively, if demand at 0.7220 is sufficient to satisfy supply and trigger a rally, major resistances are at 0.7266 (weekly S1 and 200-period SMA) and at 0.7384 (Mar high). At the same time, the SWFX market participants prefer to be short the Euro. Currently only 38% 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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