Dukascopy Bank Team
Dukascopy Bank SA
EUR/JPY 4H Chart: Ascending triangle
Comment: A traditional ascending triangle is a continuation pattern within an up-trend; this time around it was preceded by a sell-off, which increases the uncertainty regarding the direction of a break-out. Considering the technical indicators however, the risks are skewed to the upside. Accordingly, the base case scenario is a close above the level of 137 yen and a subsequent development of a rally. The height of the triangle is 370 pips, and this means the ultimate target is between the June high at 141.05 and the monthly R2 at 140.23. Meanwhile, the SWFX traders are undecided: a half of them is long and the other half is short.
GBP/USD 4H Chart: Ascending triangle
Comment: Ascending triangles formed by EUR/JPY and GBP/USD are similar in nature. Both have emerged after a decline, and in both cases technical studies imply appreciation of a base currency. In case of a bullish break-out the main target will be the June high, even though the distance between the key resistance level and 1.5930 is less than the height of the pattern. This is because the price may have trouble rising past the June high. Alternatively, if the lower trend-line is breached, the first target will be at 1.5468, represented by the July 24 low. Next is the monthly S1 and Jul 8 low at 1.54 and at 1.5330, respectively. Here the market is divided as well: 50% of positions are long and the rest 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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