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GBPNZD Breakout Potential Continues to Build

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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.

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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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GBPNZD rising wedge on the daily time frame

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14 comments
Justin Bennett says

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OGBORO preciouslife says

Thanks

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Michael Motau says

Thanks for the insight!

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    Justin Bennett says

    You’re welcome.

    Reply
Adebayo saheed says

Its worth waiting… Thanks justin

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    Justin Bennett says

    Agree. You’re welcome.

    Reply
Prashant says

gg by sharp selling between 9450-9550 .. i dont see much upside beyond 9450-9500 on GN .. possibly fall bk to 9300 area at least and lower?

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    Justin Bennett says

    I’m not sure what you’re asking. My views are in the post above.

    Reply
      Prashant says

      not asking anything in particular here. my views mostly bearish 9n GN from here in line with yours. tks.

      Reply
IDOGEI emmanuel says

J for Justin, good analysis. We shall wait.

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Kybz says

Nice piece. The set up is still valid

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