It’s been several weeks since I last discussed GBPNZD.
The pound cross has been consolidating since last December following the bounce from ascending channel support.
Although the situation looks the same as when I discussed the pair back in March, there are two notable changes here.
The first is that the pair is still consolidating.
That may not sound like a revelation, but when you consider that this has breakout potential, the continued consolidation is significant.
As a general rule, the longer a market consolidates, the more aggressive the breakout is likely to be.
So if you’re waiting for GBPNZD to break free, the extra wait time is a good thing.
The second development is that any break lower now has an 800-pip target rather than 600 pips which was the case in late March.
Because this is an ascending pattern, the target for a downside break grows with each passing day.
Keep in mind, though, that there are no guarantees GBPNZD will break lower.
Even though an upside break would be a surprise given the ascending nature of the recent price action, it shouldn’t be ruled out.
Either way, this terminal pattern is going to force market participants to make a decision by the end of May.
It’s also going to take a daily close beyond the wedge you see below to confirm the breakout.
The “daily close” refers to the New York 5 pm EST close.
Click here to get access to the same Forex charts I use for trading price action.
This is still a waiting game for now. But the longer GBPNZD consolidates, the more appealing the breakout potential becomes.
And with the prospect of an 800-pip decline, this one could be worth the wait.
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