GBPNZD At Inflection Point - Continuation or Exhaustion?GBP has been on a tear lately.
I'm going to assume bulls stepped up to the plate after all time low was tested a couple weeks ago.
Whatever the reason, doesn't really matter....
Typically, any currency that runs on a really strong trend ends up reversing and finds itself on the opposite side of the spectrum. That being said, no one can say how long the trend continues for (but I'm watching for signs of exhaustion).
This is a perfect setup to put bulls to the test. Do we see strong buying in an attempt to breakout or do they back off and let price pull back first. Either way there's an opportunity to bank some pips here imo....
One note,most breakouts fail.... So odds are price gets rejected.
Couple price targets marked on the chart depending on how this plays out.
Here's a link showing currency strength vs USD since September 1. There's a mix of risk / safe haven currencies on both sides of the spectrum so it's not about risk sentimennt. Question I ask myself, do traders all of a sudden love the GBP? Few weeks ago, you couldn't find a buyer anywhere. My guess is it's a more general move away from USD. The most oversold currencies look like the best value so we're in the early stages of money exiting DXY.
prntscr.com
I called the reversal in GBP a few weeks back.... Ideas linked below.
