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GBPNZD Wedge in Focus – Bullish Above 2.0680

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As we move into tomorrow’s BoE report, I want to take a look at a potential setup on GBPNZD. Just know that the report, which is scheduled for 15:30 GMT, is likely to produce increased volatility in all GBP pairs, so plan accordingly.

That said, I really like this wedge pattern that has developed on the 4 hour chart. The market retested wedge resistance yet again, making that the third retest. This gives us a valid pattern to watch as we move into the end of the week.

Key resistance comes in at 2.1054. This is weekly resistance dating back to 2011 as well as the neckline of a broader inverted head and shoulders pattern, best seen on the weekly chart.

Summary: Wait for a 4 hour close above wedge resistance and then watch for a retest as new support. More aggressive traders can play this on a 1 hour chart. Key resistance comes in at 2.1054. A weekly close above this level could bring about a multi-year run to 2.4464.

GBPNZD 4 hour forex chart

NZDUSD analysis

NZDUSD daily forex chart

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6 comments
Shogun says

Put your upper trend line at high of 31.01.2015 , 10 GMT instead of 03.02.2015 high at 6 GMT and will see that actual high will not break that trend line. I’m expecting a weak GBP today after news release.

Reply
    Justin Bennett says

    Hi Shogun,

    Jan. 31 was a Saturday, so I’m not sure which high you’re referring to exactly. The one hour chart tells me that my level is correct…

    Reply
      Shogun says

      Was on 30.01.2015 at 10GMT, level 2.0865 at my broker(yellow arrow).

      Reply
        Justin Bennett says

        Hi Shogun,

        It looks like you cut off a candle in your chart to make that level possible. That isn’t a very clean level in my opinion.

        Here is former wedge resistance acting as new support…

        Reply
          Shogun says

          Didn’t cut anything. Level 2.0867 is a valid resistance. Look on daily TF. No candle H4 or D1 close above. There were 2 false break and red line is another resistance now.

          Reply
        Shogun says

        Target T1 was hit. T2 and T3 hard to tell. Now it will bounce back up.

        Reply
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