Since October 22, GBP/NZD has been trending down consistently. Price went down from 1.9800 resistance to 1.8500 support area in just two months. This was a considerable price drop of nearly 1300 pips. Nonetheless, after hitting a 1.8520 low, GBP/NZD recovered quite strongly and managed to break above the downtrend trendline. Today there was a second break above the downtrend trendline, although the price has rejected the 200 Simple Moving Average, validating the resistance near 1.9100. Previously this was a strong demand zone, which potentially could be a strong supply area right now.
However, looking at the recent break above the 20 Exponential Moving Average and then clean bounce off it, it seems like the support has also been formed near 1.8900. Currently, there is no clear trend on the 4-hour chart, but considering the fast recovery and break above the downtrend trendline, the probability is shifting slightly in favor of a correctional move up.
But for this, GBP/NZD must break above the 1.9100 resistance area, which could confirm the increasing bullish momentum. If/when the price will break to the upside, GBP/NZD might initiate a strong uptrend. The nearest resistance is located near 1.9350, which is a previously formed demand area. If the price will break higher, the next resistance near 1.9635 is likely to be tested. Two Fibs confirm the final upside target, the first being the 627.2% Fibs applied to the corrective move down after GBP/NZD broke above the 20 EMA.
Key support levels: 1.8900, 1.8775, 1.8520
Key resistance levels: 1.9100, 1.9350, 1.9630
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Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
However, looking at the recent break above the 20 Exponential Moving Average and then clean bounce off it, it seems like the support has also been formed near 1.8900. Currently, there is no clear trend on the 4-hour chart, but considering the fast recovery and break above the downtrend trendline, the probability is shifting slightly in favor of a correctional move up.
But for this, GBP/NZD must break above the 1.9100 resistance area, which could confirm the increasing bullish momentum. If/when the price will break to the upside, GBP/NZD might initiate a strong uptrend. The nearest resistance is located near 1.9350, which is a previously formed demand area. If the price will break higher, the next resistance near 1.9635 is likely to be tested. Two Fibs confirm the final upside target, the first being the 627.2% Fibs applied to the corrective move down after GBP/NZD broke above the 20 EMA.
Key support levels: 1.8900, 1.8775, 1.8520
Key resistance levels: 1.9100, 1.9350, 1.9630
Thanks for your support! If you liked this analysis, please support our profile with a 👍 and follow us to get a new daily analysis.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.