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A fairly quiet day today as the market prepares for heavy event risk to close out the remainder of the week. Speaking of which, be sure to use an extra dose of patience when evaluating setups throughout the rest of the week.
GBPNZD is one pair I’m keeping a close eye on. It has been forming an equidistant channel since October 16th. Thus far the pair has touched support and resistance several times, giving us two very clean levels to watch. In fact this is the cleanest channel that I’ve seen in a while.
I mentioned several months ago that the pair appeared to have put in an important low in March/April of last year. So far that idea is holding true. Although not clearly formed, the pattern has the look of an inverse head and shoulders.
A measured move of such a pattern would put an objective at around 2.4450. This would make sense as that level intersects with the 2009 year open. Keep in mind that this was a multi-year pattern that formed, therefore it will likely take just as long to reach a measured objective of this distance.
Summary: Watch for bullish price action at channel support around the 2.0400 handle. Resistance comes in at channel resistance with key daily resistance found at the September high of 2.1055
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