GBP/NZD: Battle of the Commonwealth
GBP/NZD is definitely an interesting pair to keep an eye on. Between October 2018 and December 2018 (62 Days), we saw this pair fall out of the sky from 2.04680 all the way down to 1.81260. That is in total 2340 PIPs, which shows that there is a lot of potential with this pair to make some amazing PIPs!
Now, since then we have been steadily pulling back. For the past month from March 2019 towards the end of April 2019 we found this pair ranging between 1.9500 and 1.9000 (500 PIPs), only to break out to the upside on the 24th April and then immediately pull back the following day.
At the time of writing, this article price has pushed higher to 1.97300 and now has officially retested the broken trendline that was supporting price prior to October 2018. Could this be the retest before the eventual fall?
April’s monthly candle closed with some bullish momentum being shown. Looking at this week’s weekly candle we can also see bullish momentum pushing price to that retest mention earlier. However the daily timeframe is painting an interesting picture, what we can see is the bullish momentum has slowed down right at out retest and has begun to fall showing that the bears could be ready to take over.
Price can be seen in a rising wedge pattern, so I am expecting price to fall for another test of the trendline, which also matches up with our favoured fib level 61.8% . The 61.8% level aligns perfectly with a nice psychological round number of 1.9500. At the time of writing that would be a nice 150 PIP move, however upon reaching this key level I will keep an eye out for a rejection for another rally up. Should we finally break out of the rising wedge formation then I would expect price to fall out of the sky once again for 500+ PIP move! For now, the Battle of the Commonwealth continues…
As always keep your eyes peeled traders and be sure to remain patient within the market. Be mindful that today we had the Non-Farm Payroll release out in the US which increased the volatility in the markets. We remain cautious on improvements on Brexit so stay tuned to our market news section where you can find the latest updates.
Be sure to leave your thoughts and comments below!