Currencies have moved quite a bit after the Easter holiday. GBP/USD reached new lows and USD/CAD fluctuated quite a lot.
The team at SocGen analyzes the technical charts and provides interesting analysis:
Here is their view, courtesy of eFXnews:
GBP/USD violated the multi-year upward channel last month, confirming the possibility of an extension in the downtrend, notes SocGen.
“The monthly indicator has also breached a similar trend line, which gives credence to a price break. The pair looks poised to decline towards the graphical support at 1.4350/1.42, also the 76.4% retracement of the 2009-2014 up move,” SocGen projects.
“In the short term though, GBP/USD appears to be undergoing a sideways configuration. The daily RSI is under the graphical level of 50%, suggesting that the recovery is of limited nature and should be confined to the 100-day MA at 1.5280,” SocGen adds.
Moving to USD/CAD, SocGen notes that its uptrend has paused since January.
“The monthly indicator has tested a multiyear graphical ceiling, suggesting consolidation. In the short term, the pair is evolving within a (nearly) horizontal channel between 1.24/1.2365 and 1.2850. The daily RSI is testing a multimonth support, indicating that the phase of consolidation is likely to persist,” SocGen projects.
“In the event of a break below 1.24/1.2365, USD/CAD will face a deeper correction towards 1.23 and probably even towards the monthly channel limit at 1.20,” SocGen adds.
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