The recent big moves in forex markets created opportunities and interesting patterns on the charts. Here are the views from SocGen:
Here is their view, courtesy of eFXnews:
EUR/USD retested last March levels (1.0570/1.05) and also the multi decadal channel back in November after which it has embarked on a recovery. This week it has confirmed an inverted H&S and in the process it has also crossed above multi month weekly channel resistance (1.1060/1.10).
With the weekly indicator breaking a descending trend, the pair appears to extend the phase of rebound. Currently it is approaching 1.1270, with potential for the inverted H&S. A test of graphical levels at 1.1440/60 cannot be ruled out. However, only a durable move above that will open the next leg of the rally towards last August’s high of 1.17 and even 1.18/1.1875.
GBP/USD nearly achieved projection for the c wave of an abc down move at 1.3950 last month, and since then it is undergoing a sharp pullback. It is now probing the 50-week MA and also the lower limit of a multi-year upward channel (1.46).
With daily RSI breaching above a descending channel, extension in rebound cannot be not ruled out.
A sustained move above 1.46 will mean re-integration within the weekly channel and indicate a move initially towards the 2013 lows of 1.48.
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