As the euro rises and falls on Greek headlines, affecting the pound on the way, the team at SocGen examines the technical charts for both EUR/USD and GBP/USD.
Here are some interesting observations:
Here is their view, courtesy of eFXnews:
GBP/USD has extended the phase of recovery after testing the support from a nearly horizontal channel in April, notes SocGen.
“The pair subsequently broke above a steep descending channel and has now also crossed above last month’s highs,†SocGen adds.
Currently, SocGen notes that the the pair has testing an upward trend line resistance at 1.5950, which has been capped so far resulting in a minor correction.
“However, this should be temporary and eventually the GBP/USD looks poised to head higher towards 1.62/1.63, the 61.8% retracement since last July, and probably even towards 1.6430, the projected target for the c wave,†SocGen projects.
Turning to EUR/USD, SocGen notes that EUR/USD has formed a daily shooting star at a descending trend line resistance of 1.1385/1.1450 which corresponds with the neckline of a probable inverted H&S formation.
“With daily stochastic at resistance, a pullback looks likely towards immediate support at 1.12, the 38.2% retracement of rebound since last month lows,†SocGen adds.
“With weekly RSI at dual resistance, neckline of a probable inverted H&S at 1.1450/1.1536 remains a key level for next phase of recovery. A break below 1.08 will signal a retest of 1.05/1.04,†SocGen projects.
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