EUR/NOK 1H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
The channel was formed after the currency pair broke out of the rising wedge to the downside. However, we should not be deceived by the bearish outlook implied by the currently emerging pattern. This situation highlights the importance of analysis of the higher time frames. In this example, in the daily chart EUR/NOK approaches a major up-trend, which is more likely to stay intact than the falling resistance line. Accordingly, our expectation is a sell-off from 9.40, while a subsequent rally from 9.29 is likely to result in a break-out to the upside, in which case the weekly PP and 200-hour SMA circa 9.47 are to become the primary objective, followed by Sep 30 and Sep highs at 9.56 and 9.63, respectively.
© Dukascopy Bank SA
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