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EUR/USD: Multi-Decadal Channel; Cable: New Leg Down – SocGen

EUR/USD managed to find some stability, but at a very low range. However,  the baton was  passed to GBP/USD which suffered a major downfall. What’s next for the two major pairs?

The team at SocGen provides an updated technical analysis:

Here is their view, courtesy of eFXnews:

EUR/USD tested this week the multi decadal upward channel support at 1.05/1.04 which also happens to be a projection for the complex corrective downtrend since 2008, notes SocGen.

“Monthly RSI is at an extreme and suggests possibility of a downside break. A clear breach of 1.05/1.04 will confirm that the extant phase of downtrend is not just a correction of the up move since 2000, but of a larger degree. In such a case, the down move will not only extend towards parity (1.00) but also towards 2001 highs of 0.98/0.96 and then to year 2000 lows of 0.84/0.82,” SocGen projects,

Short term upside is likely to be capped at 1.1090, while last month highs of 1.1536 will be a key resistance,” SocGen adds.

euro dollar technical analysis March 2015 SocGen multi decade channel chart

In GBP/USD, SocGen notes that it faced resistance near its 100 day MA last month and has retraced breaking below a multi month descending channel at 1.49.

“This also happens to be the lower limit of an upward channel drawn since 2010 and the 61.8% retracement of 2009-2014 up move,” SocGen adds.

The definite violation of 1.49 will confirm next leg of downtrend towards 2010 lows of 1.4350/1.42. Short term upside is likely to be capped at 1.5150,” SocGen projects.

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Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.