EUR/USD 1H Chart: Channel Up
Comment: The Euro has been strongly bullish since it bottomed out in April near 1.1220, and the chances are the single currency will keep moving higher. EUR/USD is trading next to the lower boundary of the emerging channel at the moment, which implies a rally from the current levels towards 1.16, where the rate is expected to meet the upper boundary of the pattern. Another argument in favour of a stronger Euro is the fact that the share of bears exceeds the share of bulls by 28 pp, meaning the instrument is oversold. Alternatively, in case the price closes under the green trend-line, our focus will shift towards 1.1390/80, where the weekly pivot point joins forces with the seven-day up-trend.
GBP/CAD 4H Chart: Channel Down
Comment: Although last week there were risks of GBP/CAD breaking out of the channel after forming a double bottom, resistance at 1.85 did not let the Sterling to change the outlook on GBP/CAD and remained intact. Accordingly, we expect the rate to bounce off of the upper trend-line of the channel and then drop by some six figures during the next two weeks before stabilising near a cluster of supports circa 1.7770, created by the monthly S2, 2015 low and the lower edge of the pattern. A sell-off is also implied by the positioning of traders in the market, being that as many as 73% of open positions are long, which means a decreased chance of new buyers entering the market in the nearest future.
Collected From Fxsteet
By Dukascopy Bank Team