On March 11th, I pointed out two ascending channels on GBPNZD that would offer an opportunity in the days ahead.
The larger channel extends from the late 2016 lows, while the smaller one started with the 2019 low from July.
Here’s what I wrote on March 11th:
Given that the pair is coming off that 2.1200 resistance area, any daily close below the smaller ascending channel support could trigger a broader selloff.
At the moment, that channel support comes in between 2.0100 and 2.0200.
A daily close below that level could send GBPNZD lower toward the multi-year channel floor.
Notice Monday’s low of 2.0048, followed by a significant bounce.
That bounce from the GBPNZD occurred right at the 2019 channel support.
It’s exactly what I wanted to see from the pair.
Not because I’m interested in buying the GBPNZD, but because I want to see the pair respect channel support at 2.0050.
If that 2.0050 area is serving as support now, it means a daily close below it would signal weakness.
That level would also flip to resistance following a close below it.
As I wrote on March 11th, the target following a daily close below channel support near 2.0050 is the bottom of the larger channel near 1.8900.
This is still a waiting game for now, but I do think a breakdown from the GBPNZD is imminent.