EUR/CAD 1H Chart: Channel Up
Comment: We are short-term bullish on EUR/CAD, but the
potential gains are limited. The currency pair is poised for a rally
from the 200-hour SMA and the rising trend-line at 1.4580, but the rate
is not seen as rising higher than a major resistance area circa 1.47.
There the nine-week down-trend line is strengthened by the weekly R1 and June 2 high, and a test of this supply area is likely to trigger heavy selling, which should eventually force the pair out of the bullish channel it is currently trading within. An additional argument to be short EUR/CAD in the medium and long terms is traders' positioning: the share of longs in the SWFX market is already as high as 74%.
EUR/GBP 4H Chart: Channel Down
Comment: As a result of EUR/GBP bumping into a
descending resistance line that connects the peaks of the last 7+ years,
the currency pair is now trading in a bearish channel. Considering that
the exchange rate is also right at the upper bound of the pattern and
that most of the daily and weekly technical indicators are giving ‘sell'
signals, the shorter-term perspective is strongly negative as well.
The price is expected to confirm resistance near 78 pennies (down-trend line and 200-period SMA) and start a bearish wave, which should eventually extend down to the 0.7530/20 area. There the lower bound of the channel coincides with the February low and monthly S1 and thus creates a solid demand zone.