GBP/NZD Key Points
- GBP/NZD hourly triangle continuation pattern.
- Price breaks out to the downside, with the trend.
- Clean retest of previous support as resistance.
GBP/NZD Technical Analysis
Morning team,
Well then. Yesterday's GBP/NZD triangle continuation trade played out pretty damn nicely, didn't it!
Here's a quick blurb and the chart from yesterday's analysis:
But it's here on the GBP/NZD hourly that we've now seen a triangle pattern form. When it forms within the context of a higher time frame trend and then breaks out in that same direction, it's quite a strong continuation pattern.
Now take a look at where we're at now:
A clean continuation lower if ever there was one.
You can see price pulled back and tapped the underside of broken support, where it rejected HARD as resistance. From here, it really didn't matter where you sold. Your stop was most likely somewhere back above the trend line and that previous swing high, so was never in doubt.
While the bears are now firmly in control and momentum looks good to keep selling short term rallies into previous support turned resistance like I've marked in grey, its always interesting how markets tend to sit on key support/resistance levels and wait for a news release before reacting at them. A prime example being GBP/NZD right here as price has now pushed down to swing low resistance and stalled.
We have the Reserve Bank of New Zealand's interest rate decision during Asia (check the Forex Factory calendar for the exact release within your timezone) which is probably what price is waiting for before breaking or holding.
If you're going to hold through and punt on the decision, just be aware that this is what's most likely to move the market here, especially if the decision isn't to hold rates as expected. If not, then close out and enjoy your stress free profits.
The markets gave us plenty of opportunity to make money on this one and it's good to hear that some of you took advantage of the setup!
Best of probabilities to you,
Dane.
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