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.
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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