With the economic outlook looking a little brighter for the U.K. and less upbeat for the comdolls, I’ve got my eyes locked on this potential long GBP/NZD trade.
As you can see from the pair’s daily forex chart, GBP/NZD has been on a steady uptrend. In fact, price appears to be breaking above the short-term channel and may be headed for the top of the longer-term channel.
I’m thinking that the outcome of the Scottish referendum might determine where price could go, with a winning “No” vote likely to result in more gains for the pound. This might lead to further rallies past the 2.0000 major psychological handle all the way up to the 2.0600 area!
Recent data from the U.K. has been mostly stronger than expected, as the latest jobs release showed sustained improvements while the BOE minutes still showed a couple of votes in favor of rate hikes. And, as some of my comdoll buddies mentioned in my previous blog post, the U.K. is doing relatively well compared to most of the major economies. Meanwhile, the projected slowdown in China might continue to dampen demand for commodity currencies, including the New Zealand dollar.
I’m looking to enter on a breakout above 2.0100 with a wide stop below the 2.0000 major psychological support and a long-term target at 2.0600. What do you think of this forex setup?
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