Societe Generale FX Technical Strategy Research notes that EUR/USD has accelerated its recovery and has broken through an up sloping channel (currently at 1.1104).
“The short-term indicators are now hovering close to a ceiling, which denotes the possibility of a pause. However, we expect this to be temporary, and the recent high of 1.1043 should cushion the downside,” SocGen argues.
On EUR/JPY, SocGen notes that the pair recently hit an interim hurdle at 126, representing the April 2015 low and the upper bound of the upward channel within which the recovery has evolved.
“Since then, a consolidation has been under way, but this is likely to be short-lived. The daily descending trend at 121.80 should act as an important support. Once EUR/JPY crosses above 126, it will likely see a larger up move towards 128.20 and even 129.65, the 50% retracement from 2014,” SocGen adds.
Source: Societe Generale Cross Asset Research
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