Dukascopy Bank Team
Dukascopy Bank SA
GBP/CAD 4H Chart: Double Bottom
Comment: GBP/CAD formed a double bottom—a pattern that portends a rally. An emerging falling wedge and the ’buy’ signals in the four-hour time-frame add weight to this scenario. However, there are many counter-arguments as well. First of all, the angle between the converging trend-lines that form the falling wedge is very acute, implying that this might still be a descending channel, as we noted last week. At the same time, the daily and weekly technical indicators are mostly bearish. Accordingly, we should wait for a pair’s reaction to a test of a solid supply area circa 1.84. If it is breached, the 200-period SMA is to become the next target. Otherwise, we will expect a return to the April low and monthly S2.
EUR/AUD 1H Chart: Ascending Triangl
Comment: A sell-off that began in the first half of April is unlikely to extend any further. Despite the fact that since the beginning of this year EUR/AUD has been trading in a down-trend, the pair has just met a 45-month up-trend, which resulted in an ascending triangle, a pattern that usually indicates growing demand. As a result, our base-case scenario is a rebound from a formidable support zone near 1.46 (daily and weekly PP, up-trend and 200-hour SMA) and beyond the resistance at 1.4613, namely the upper boundary of the pattern. Once this level is broken, the main target will be the major trend-line at 1.49, although before that the Euro will have to push through the weekly R1 and April 17 high.
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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