Interesting technical patterns are evolving on both cable and euro/yen.
Here is the view from SocGen:
Here is their view, courtesy of eFXnews:
GBP/USD broke above one year descending channel and has crossed above last month highs before a pullback is taking shape, notes SocGen.
“Short term retracement is likely to be cushioned at 1.56/1.5550,” SocGen projects.
“The rebound should continue towards 1.62/1.63, the upper limit of an upward channel and the 61.8% retracement since last year highs,” SocGen adds.
Turning to EUR/JPY, SocGen notes that it has achieved the upper limit of a multi month descending channel at 141 where it has formed a daily shooting star.
“A probable double top at same level suggests possibility of a retracement,” SocGen argues.
“Currently the pair is testing an immediate support at 138/137.50 which happens to be the confirmation level of the pattern and an upward channel encompassing the recovery since April. A break below 138/137.50 will signal possibility of a correction towards the neckline of the inverted H&S at 136.70 which remains a decisive level for a retest of May lows at 133.00,” SocGen projects.
“Only a move past 141 will signal further rebound,” SocGen adds.
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