Both AUD and CAD managed to overcome recent blows and stage recoveries. Is this sustainable? Not so fast.
The team at SocGen sees both commodity currencies weakening, and sets targets:
Here is their view, courtesy of eFXnews:
USD/CAD in resuming its move higher and still en-route to test March 2009 highs of 1.30, notes SocGen.
“Monthly RSI is testing a multiyear graphical ceiling. The weekly indicator is breaking an ascending channel limit suggesting positive momentum will continue. Short-term pullbacks, should be cushioned at 1.21/1.22, the 23.6% from 2011 lows,” SocGen argues.
“The pair ultimately should continue the uptrend towards 1.30 and even probably towards 1.35/1.36, the weekly channel limit,” SocGen projects.
Turning to AUD/USD, SocGen notes that it has confirmed a head and shoulders pattern in the monthly charts, and the downtrend accelerated when the pair broke below the descending channel.
“The monthly indicator is also breaking a critical support, confirming the decline,” SocgGen argues.
“With daily RSI diverging positively, a shortterm bounce cannot be ruled out towards 0.80/0.8050. A definite close below 0.7590 will mean an extension in the downtrend towards 0.72, the multi decade channel support,” SocGen adds.
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