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The pattern started on the 27th of October, 2011, when the pair bounced from 0.9893 and after testing pattern's resistance band at 1.0524 on 25th of November, 2011, and at 1.0447 on 4th of June, 2012, it has slowed down at 1.0045 where the pair is currently trading. The SWFX market sentiment shows that 65% of the traders expect the pair to appreciate in the near term. Technical indicators on aggregate point at augmentation of the pair on 1W time horizon indicating that SMA200 is rather strong resistance level for the pair and we might see a price correction towards it. Long traders, could focus on the SMA200 at 1.0090. If the pair breaches this level next target could be set at the 25th of July peak at 1.0226.
Short traders, who expect that the pair will continue to follow pattern's general trend, could focus on the weekly retracement (Fibonacci) level at 1.0026. If this level is breached, next targets should be set at the parity level and 0.9974.
Main relevant fundamental news should come out on 9th of August when both countries will release their trade balances. This could completely change the further development of the pair. Significant amount of economic data coming out from the US every week should not be forgotten as well.
© Dukascopy Bank SA