Dukascopy Bank Team
Dukascopy Bank SA
EUR/CHF 4H Chart: Rectangle
Comment: EUR/CHF is in a good position to lunge forward. And while the emerging channel is weak, the manner in which the currency pair has been consolidating recently speaks in favour of a rally. There is a solid support area near 1.0920, and it should be able to trigger intensive buying. If the price indeed manages to climb over 1.0960, the next target will be the upper boundary of the potential channel at 1.1020. Then, after a bearish correction, we may expect a leg to 1.1050, namely the monthly R2 and September high. On the other hand, if the bears push through 1.0920, the sell-off will likely extend down to 1.0860, where the monthly PP merges with the 200-period SMA and weekly S1.
GBP/USD 4H Chart: Channel Down
Comment: Since the last time we reviewed GBP/USD, the currency pair has effortlessly broken through the 2010 low and thus has confirmed its intention to go lower. The bearish outlook is also suggested by the fact that the Sterling is overbought in the SWFX market—70% of positions are long. The next major objective is now the 2009 low at 1.35. In the meantime, the Cable is expected to bounce off of the falling trend-line and slide down to 1.4050, where it is going to meet the lower boundary of the pattern and the monthly S3 level. Alternatively, in case the rate rises past 1.4230, we will expect a rally up to resistance at 1.4390, created by the monthly S2 and weekly PP.
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