The American Dollar is losing value against the Danish Krone in a medium-term descending channel. Formation of the channel began after the currency pair broke the support line of the preceding long-term descending channel in the result of the sharp depreciation of the Dollar between May 11 and 16.
By this moment, the rate has made two confirmations from the top and only one from the bottom, which means that the pattern has not reached the maturity yet. From a technical perspective, the slip to the bottom boundary of the pattern is expected to follow.
However, the first days of July or the last two green candles showed that the pair has made a premature rebound. If the next two-three days will attest this transformation, it would be possible to consider falling wedge, as a new guiding pattern.
But such scenario is doubtful because if the pair managed to rebound without any meaningful barriers on its way, then even more it has to bounce off from the combined resistance level set up by the weekly and monthly PP at 6.5546 and 6.5659. In such situation two scenarios are likely to follow.
If it succeeds to bypass this barrier, that in accordance with the characteristics of the falling wedge and taking into account the way the pair moved previously, it is expected to break though the upper trend-line of the channel somewhere in the second half of July.
If a correction occurs and it fails to break through this cellar, the rate is expected to drop until the bottom trend-line of the channel, which is supported by the combination of the monthly and weekly S1 at 6.4526 and 6.4413. In this case, a rebound is expected to follow as well. Firstly, because the pressure coming from this support level is quite strong. Secondly, because this contact will represent only second confirmation point. And, usually, we need at least two reaction highs and lows to only confirm an existence of the channel (not speaking about its upcoming breaking).
By this moment, the rate has made two confirmations from the top and only one from the bottom, which means that the pattern has not reached the maturity yet. From a technical perspective, the slip to the bottom boundary of the pattern is expected to follow.
However, the first days of July or the last two green candles showed that the pair has made a premature rebound. If the next two-three days will attest this transformation, it would be possible to consider falling wedge, as a new guiding pattern.
But such scenario is doubtful because if the pair managed to rebound without any meaningful barriers on its way, then even more it has to bounce off from the combined resistance level set up by the weekly and monthly PP at 6.5546 and 6.5659. In such situation two scenarios are likely to follow.
If it succeeds to bypass this barrier, that in accordance with the characteristics of the falling wedge and taking into account the way the pair moved previously, it is expected to break though the upper trend-line of the channel somewhere in the second half of July.
If a correction occurs and it fails to break through this cellar, the rate is expected to drop until the bottom trend-line of the channel, which is supported by the combination of the monthly and weekly S1 at 6.4526 and 6.4413. In this case, a rebound is expected to follow as well. Firstly, because the pressure coming from this support level is quite strong. Secondly, because this contact will represent only second confirmation point. And, usually, we need at least two reaction highs and lows to only confirm an existence of the channel (not speaking about its upcoming breaking).