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Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
On Tuesday I wrote about the potential for GBPNZD to weaken further below 1.9660.
The pair was about to close the day below rising wedge resistance.
It was significant given how GBPNZD had broken to the upside of this level back on May 1st.
As I’ve written many times on this site, topside breaks of ascending levels rarely last for very long.
As you can see, the GBPNZD was no exception.
I was even alerting members to my plan to short the pair as soon as it broke higher earlier this month.
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Here’s my comment to members on May 7th:
Since Tuesday’s post, GBPNZD has lost just over 100 pips.
That isn’t much for this cross, but the market is still holding below wedge resistance which is now just below the 1.9700 handle.
I’m still short GBPNZD, but I won’t add to the position again until I see a daily close below wedge support near 1.9470.
That would open the door to the next key support at 1.9050.
And if this wedge plays out like most, we could see a run at the 1.8650 region.
Keep in mind, however, that a move of that magnitude would likely take weeks to play out.
But the pair is going to get pressured to make a decision next week.
The terminal nature of this wedge is only going to allow GBPNZD another week or two to make a decision.
In fact, I would be surprised if the market gets away with another week without showing its intent.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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