This chart is a 4-hour timeframe of GBP/NZD, and it presents a bearish setup based on a combination of technical tools and patterns. Below is a detailed explanation of the setup:
1. Rising Wedge Formation (Reversal Pattern)
The price is forming a rising wedge pattern, indicated by two converging yellow trendlines.
A rising wedge in an uptrend is considered a bearish reversal pattern, meaning that once the price breaks below the lower trendline, it signals a potential downtrend.
2. Key Resistance Zone (Green Area at the Top)
There is a strong resistance zone marked in green around 2.2754.
The price is expected to move toward this level before reversing downward.
This area likely represents a supply zone where sellers might take control.
3. Fibonacci Retracement Levels
Fibonacci retracement levels are plotted to identify potential support levels where the price might retrace.
The key levels on the chart include:
23.6% (2.25618)
38.2% (2.24427)
50.0% (2.23644)
61.8% (2.22501)
100.0% (1.1938) – Ultimate target.
4. Projected Bearish Move (Blue Arrows)
The blue arrows indicate a potential fake-out to the upside, where the price may briefly break above resistance before reversing sharply.
The first downside target is the lower trendline of the wedge.
A confirmed breakdown of the wedge could trigger a larger decline towards Fibonacci levels and the major demand zone (green box at the bottom).
5. Bearish Confirmation Factors
If the price fails to break above resistance and instead breaks below the lower trendline, a bearish confirmation will be in place.
If the price closes below 2.2560 with strong momentum, it could accelerate the downward move.
Conclusion
This setup suggests that GBP/NZD is at risk of a bearish reversal if:
The price fails to sustain above the resistance zone.
It breaks below the rising wedge structure.
Fibonacci levels provide confirmation as targets.
Traders looking to short this pair might wait for a breakout confirmation before entering, with stop-loss levels placed above the resistance zone and potential profit-taking levels near the Fibonacci retracement zones.
1. Rising Wedge Formation (Reversal Pattern)
The price is forming a rising wedge pattern, indicated by two converging yellow trendlines.
A rising wedge in an uptrend is considered a bearish reversal pattern, meaning that once the price breaks below the lower trendline, it signals a potential downtrend.
2. Key Resistance Zone (Green Area at the Top)
There is a strong resistance zone marked in green around 2.2754.
The price is expected to move toward this level before reversing downward.
This area likely represents a supply zone where sellers might take control.
3. Fibonacci Retracement Levels
Fibonacci retracement levels are plotted to identify potential support levels where the price might retrace.
The key levels on the chart include:
23.6% (2.25618)
38.2% (2.24427)
50.0% (2.23644)
61.8% (2.22501)
100.0% (1.1938) – Ultimate target.
4. Projected Bearish Move (Blue Arrows)
The blue arrows indicate a potential fake-out to the upside, where the price may briefly break above resistance before reversing sharply.
The first downside target is the lower trendline of the wedge.
A confirmed breakdown of the wedge could trigger a larger decline towards Fibonacci levels and the major demand zone (green box at the bottom).
5. Bearish Confirmation Factors
If the price fails to break above resistance and instead breaks below the lower trendline, a bearish confirmation will be in place.
If the price closes below 2.2560 with strong momentum, it could accelerate the downward move.
Conclusion
This setup suggests that GBP/NZD is at risk of a bearish reversal if:
The price fails to sustain above the resistance zone.
It breaks below the rising wedge structure.
Fibonacci levels provide confirmation as targets.
Traders looking to short this pair might wait for a breakout confirmation before entering, with stop-loss levels placed above the resistance zone and potential profit-taking levels near the Fibonacci retracement zones.
Note
Note
Note
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
For Training visit.
Website wave-trader.com
Website techtradingacademy.com
Slack: wavetraders.slack.com
Telegram: t.me/Wavetraders
X: twitter.com/Wave__Trader
FB: facebook.com/WTimran
Website wave-trader.com
Website techtradingacademy.com
Slack: wavetraders.slack.com
Telegram: t.me/Wavetraders
X: twitter.com/Wave__Trader
FB: facebook.com/WTimran
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.