Dukascopy Bank Team
Dukascopy Bank SA
EUR/USD 1H Chart: Channel Up
Comment: From the technical perspective, the Euro is likely to gain value during the next several days. First of all, the most popular currency pair has broken the eight-month down-trend resistance line, which exposed 1.15. Secondly, the price has already managed to form a channel, within the boundaries of which it is expected to ascend to the October 2015 high. Thirdly, the technical indicators, both in the four-hour and daily charts, are mostly pointing north. In addition to this, the number of short positions (58%) exceeds the number of longs (42%), meaning selling pressure is to stay depressed. Even if for some reason the exchange rate dips under 1.1370, the pair will still have a good chance of rebounding from the recently broken trend-line at 1.13.
EUR/GBP 4H Chart: Channel Up
Comment: Even though EUR/GBP violated the six-month up-trend at the beginning of March, it managed to preserve bullish momentum. Now this trend-line serves as an upper edge of the emerging channel. However, while the near-term outlook on the pair is positive, we do not expect the rate to keep recovering for long. Considering the technical indicators in all three relevant time frames and the fact that a majority (69%) of the market participants is holding short positions, EUR/GBP is highly likely to update March high at 0.7950 in the nearest future. However, it should not be able to rise above resistance at 0.8040, which is the upper bound of the descending seven-year-old channel reinforced by the monthly R1.
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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