GBPNZD is in the process of breaking above what is arguably the best technical level in the Forex market at the moment. We’ve been talking about the 2.1500 handle ever since the seven-month falling wedge became apparent back in March.
What makes this level the best?
For starters, it supported prices on several occasions between December of 2015 and February of this year before acting as resistance in March. What’s more, it’s the 23.6 Fibonacci level when measuring from the 2015 high to the current 2016 low.
Since GBPNZD broke free from the multi-month falling wedge, the pair has given us more than 600 pips of profit. The move I’m referring to came in late April as the cross retested 2.0850 as new support.
From here I continue to favor higher prices toward 2.2400. In fact, the objective for a falling wedge such as this places a longer-term target in the 2.50 region.
In the near-term and concerning 2.1500, the day is far from over which leaves the current breakout unconfirmed. Only a daily close above 2.1500 would warrant further consideration.
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Hi Justin
Have placed my trade at 2.17282, should I place my SL at support or rather at 23.6 Fibo, please advise as I am unsure which is the best option. For me 120 Pound SL is a lot of money.
Kind Regards
Michael
South Africa
Michel, i can understand your frustration. Right now as i see it, the price is almost touching the 100 day MA. When i see the Ichimoku charts, the price is almost touching the top boundary of the kumo cloud. From hereon the bears will face a lot of resistance as the kumo cloud cover is quite thick. I am hoping that with Brexit fears receding in the background, the bulls will be back in action and we will see bullish movement from Monday onwards. I am keeping a close watch as I am also in a negative position in this trade and i am hoping for bullish movement soon.