Gbp-nzd
GBP/NZD short opportunity Technical Analysis: Bias Bearish
- The pair remains capped below 200-DMA, recovery failed to break above
- Momentum indicators bearish
- RSI below 50 levels, biased lower
- MACD well below zero levels and -ve DMI dominance
Fundamental Factors:
Sterling stumbles on lower inflation. UK inflation came out at 2.4%, below 2.5% that had been expected.
GBP undermined by speculation about a tougher Brexit coming after Tuesday's outcome of the Commons' vote over the Brexit bill.
Support levels - 1.8883 (38.2% Fib), 1.8785 (Nov 9 low), 1.8615 (Jan 12 low)
Resistance levels - 1.90, 1.9043 (5-DMA), 1.9095 (200-DMA)
Good to go short around 1.8950/60, SL: 0.91, TP: 1.8885/ 1.8785/ 1.8615
GBPNZD Neutral Bias SetupsGBPNZD 0.08% Price tried to break out of the bearish major TL but failed, looking for another 4 hour close below the TL & 61.8% fib ideally with a bearish engulfing or bearish spinning top to go short.
To go long I need a 4 hour break of this candle with continued bullish momentum or a clean retest and rejection of the broken downward TL sending it back up to re-test the weekly PRZ and possibly 38.2% fib at 1.93200 level with the double bottom formation
GBP / NZD - Sell into resistance - SHORT The GBP has shown a little strength (and I mean a little), more sideways movement, but this could get us back up into an area of resistance I've marked on the chart, then we'll sell that down to the final target of the attached much bigger Head and Shoulders move that I'm still in since May 16 from the top of the Right shoulder.
GBP/NZD 4H Chart: Long-term trend-line breachedThe four-hour chart reveals that the Sterling has been trading sideways against the New Zealand Dollar since mid-October, 2017. This movement has been constrained in a flat descending channel. The Pound was moving along a long-term trend-line since the beginning of 2018 prior to breaching the given line this week.
From theoretical point of view, this breakout should point to a medium-term decline. The fact that the Pound breached the 55-, 100– and 200-period SMAs likewise adds some ground to this bearish scenario. The rate was testing the weekly S2 at 1.9227 mid-Friday.
It is likely that some short-term correction up to 1.96 occurs early next week. However, bears should eventually take the dominant hand and push the rate lower, setting the bottom channel line and the 23.60% Fibonacci retracement at 1.86 as a possible target during the following months.