Daily Price Action
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GBPNZD: Pending Short Idea With Room to Run

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The GBPNZD is one currency cross that I don’t discuss often. Like some of the other New Zealand and Australian dollar crosses, the GBPNZD is known to be more choppy than some of the other pairs even while trending.

However, I still keep an eye on the pair because every once in a while it does something that catches my attention.

In this case, the cross is testing a trend line support that has been in place since August of last year. You can see from the second chart below how the GBPNZD has started to “lean” on this support level with increasing frequency in recent weeks.

That’s often a sign that the market is about to break through a level. It suggests that bids are becoming increasingly scarce along this trend line that began nearly seven months ago.

Now, if we take a step back, we can see where the GBPNZD may gravitate to if the 1.9020 area breaks down.

GBPNZD long-term trend line

The trend line above has been in place since the 2016 low. The level served as support on four separate occasions but hasn’t revisited it since last July.

That could be an indication of a move lower over the next few months.

Just keep in mind that a retest of the 2016 trend line shown above will take weeks if not months to play out. It will also likely involve a lot of back and forth price action on the way down, so be sure to set your expectations accordingly.

For now, I’m waiting to see if we get a daily close (New York 5 pm EST) below trend line support near 1.9020. If we do, I will consider opening a small short position following a retest of the level as new resistance.

The next key support levels below 1.9020 come in at 1.8800 followed by 1.8610.

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GBPNZD key levels on daily chart

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12 comments
Jinx says

Ah, my favorite pair! Love the trading action it provides and hate it for the same reason. One of my most challenging pairs that I cannot stay away from!

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vincent says

noted with thanks

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Syed Hassan says

Noted with thanks

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Roy says

I’ve been tracking this pair for weeks.
I’m glad coach has got his eye on this also.

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Samiir ma foolge says

Thanks

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Mimi says

Much appreciated

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Massimiliano says

would not that be a wedge as well? anyway you are the best and very soon I will join your comunity. Thanks for your great trading ideas

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    Susan says

    Hi Lwanga,its very easy to open a paypal account the same way you opened skrill using a debit card.You have a debit card i believe (its the atm card).Try it out and see

    Reply
R.BAMBANG+SUTRISNO says

Terima kasih Justine yg selalu mengingat saya ..utk memberi informasi yang sangat berharga untuk suksesnya trading saya..

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alphonsus chukwu says

thanks

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Chuck says

Hi Justin. Why wouldnt 189.60 be considered support when it had all those daily rejections the past week? Thanks in advance

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