USD/DKK 4H Chart: Rising Wedge

Source: Dukascopy Bank SA
© Dukascopy Bank SA
The downside risks in USD/DKK are rapidly increasing. This is implied by the pair trading between two ascending but converging trend-lines, namely within the rising wedge, which usually portends a sell-off. While we may expect a test of 7.10 in the near future, further advancement is highly unlikely because of the Apr high and weekly R2. We will then expect a break-out through the lower edge of the pattern. In this case the first main target will be the Nov 25 low at 6.98, followed by a substantially stronger demand area at 6.93/6.92. Another argument against the rally is a high proportion of long positions in the market. The bulls take up 74% of all the traders.
© Dukascopy Bank SA
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