GBPNZD finally did what many Forex traders have been waiting for, including myself. During yesterday’s session the pair closed above the key 2.1040 resistance level.
This was a significant close for a couple reasons. The first reason being that this level has acted as key resistance for more than four years now. Since April of 2011 to be exact.
The second and possibly more significant reason is that this close confirms the inverse head and shoulders that has been forming for the past four years.
The weekly chart illustrates the pattern well.
While this may not be the cleanest inverse head and shoulders pattern, it certainly has huge implications for future price movement.
Notice that the range from the neckline to the bottom of the head is approximately 3,340 pips. This puts the long-term measured objective at 2.4450, which also happens to be the 2009 low.
Of course being a longer-term target means that we will see many swing highs and swing lows along the way.
Summary: Watch for bullish price action on a retest of 2.1040 as new support. The next key resistance level comes in at 2.1600 with 2.4450 being our long-term target.