“GBP/USD violated a multi-decade support and breached a steeper descending channel (1.2870), indicating long-term bearish signals. This is confirmed by the monthly stochastic, which remains in negative territory (below 25%).
The pair did rebound recently, however, and achieved the maximum potential at 1.2660. Given likely long-term bearish price action, pullbacks are expected to remain corrective. The pair has breached a daily trend support, which suggests that the recovery has run its course and that the down move should resume.
Thus, GBP/USD should head towards the mid-October high of 1.2330 and perhaps even towards 1.2090/30.
After exhibiting exhaustion signs near the neckline of a double top, NZD/USD has been undergoing a correction.
Recently, it rebounded towards 0.7390, the 76.4% retracement from September, and it has breached a multi-month upward channel.It is probing the neckline of a head-and-shoulders pattern, which denotes further down move.
A break below 0.7030/10 will confirm the pattern and indicate a correction towards 0.6860, the 76.4% retracement from May”.
Copyright © 2016 Societe Generale, eFXnews™
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