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GBPNZD could turn out to be one of the better opportunities of 2019.
That’s a bold statement, I know, but the technicals here are very convincing.
I first wrote about this wedge pattern on March 26th.
Back then the pair was trading at 1.9113. It had also just tested wedge support for the first time since its inception on February 15th.
We didn’t know it then, but GBPNZD would spend another month consolidating. Even today the pair is still churning sideways.
However, as I wrote on the 18th of April, the longer this market consolidates, the more explosive the breakout is likely to be.
But even though GBPNZD is still in consolidation mode, something happened this week that’s worth pointing out.
Wednesday’s session tagged a key resistance area at 1.9570. This particular region has been in place since late 2017.
Here it is on the weekly time frame:
Notice that this week’s candle is, at least so far, carving a bearish pin bar.
Not only is 1.9570 a critical resistance area, but it’s also very near the 61.8% Fibonacci retracement of the impulsive selloff between October and December of last year.
In fact, the 61.8% Fibonacci lines up at 1.9575. That’s how close it is.
This week’s retest may have been just what sellers needed to see in order to push their agenda next week.
Just keep in mind, though, that sellers still need to clear wedge support to expose downside targets.
I sold GBPNZD earlier this week at 1.9606. I’ve since added to the position to give me an average rate of 1.9587.
I will add to the position following a daily close below wedge support, but not before.
My entry and reasons behind it were discussed at length in the member’s area.
As for key support levels on the way down, I would keep a close eye on both 1.9050 and 1.8630.
But first, GBPNZD sellers need to clear wedge support near 1.9300/20 on a daily closing basis.
Until then, wedge support will continue to attract buyers.
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