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GBPNZD Bounces from February Low, Double Bottom Forming?

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GBPNZD was the biggest mover during yesterday’s session, gaining 1.36% after rebounding sharply from the February low at 2.0624.

Technically, this level was broken on Friday by 24 pips. But apparently that wasn’t enough to keep the bulls at bay as the pair has regained a total of 283 pips from yesterday’s open.

Although the technical constraints of GBPNZD haven’t changed since I last covered the pair, the recent bounce has made things a bit more interesting. If you remember from that commentary, I pointed out that aside from wedge resistance, the two key horizontal levels to keep an eye on are 2.1500 and 2.2400.

What’s interesting given the second bounce from 2.0624, is that the distance to the neckline at 2.1500 (876 pips) is almost the same as the distance from 2.1500 to 2.2400 (900 pips). As you can see, only 24 pips separate the two.

So why might this be significant?

As you may well know, the measured objective for a double bottom is found using the distance from the support level to the neckline, in our case 876 pips. If we then use that same range to measure higher from the neckline, we get 2.2400 or thereabouts.

Whether or not this is indeed significant has yet to be seen as only a close above 2.1500 would confirm a double bottom here.

That said, a close above wedge resistance would add conviction to the idea that GBPNZD has bottomed, the result of which could eventually test the 2.2400 handle and possibly much higher.

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GBPNZD potential double bottom

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