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A pattern we’ve been watching for more than a week now is the GBPNZD equidistant channel that started forming in mid October.
The market opened lower to start the week and was unable to reclaim channel support today. In fact the pair formed a bearish pin bar on the 4 hour chart after retesting former channel support, now acting as resistance.
My overall bias here is bullish, however the recent break of channel support leads me to believe that we may see a pullback before the next leg higher.
This setup is worth looking at for two reasons.
- Channel support and resistance are very well-formed, making any break that much more reliable
- The risk to reward ratio is favorable
Note: Because this bearish pin bar is quite small, I would like to see how the market reacts around the 2.0460 resistance level.
Summary: Opportunity to trade this bearish pin bar from former channel support. It’s advised to watch how price action reacts below the 2.0460 resistance level. A 4 hour close below 2.0400 should provide bearish conviction. Key support is down around 2.0000.
EURCAD analysis
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