I’ve been watching this long-term GBP/NZD bullish channel for quite some time now, and I’m seeing a chance to join the recent rally. What do you guys think?
Long GBP/NZD Idea
The pair broke above a bullish flag pattern to signal that a continuation of the climb is in the works. This could last by the same size as the flag mast, which spans around 1.8600 to 1.9200 or 600 pips.
At the same time, price is busting through the mid-channel area of interest to confirm that buyers might have enough energy to take GBP/NZD all the way to the top.
Stochastic is pointing up to reflect the presence of bullish pressure, but the oscillator is also dipping into the overbought zone to signal exhaustion.
Sterling might be a tricky play this week, though, as the U.K. Supreme Court is set to deliver a make-or-break ruling on prorogation, which would likely impact the chances of a “no deal” Brexit.To top it off, the U.K. economy has its CPI and retail sales reports lined up this week, not to mention the BOE decision and MPC minutes. Last week’s set of economic figures turned out impressive, so it’s very possible that this week’s batch could also be upbeat and that BOE policymakers could stay optimistic.
Meanwhile, the Kiwi has been on weak footing in the previous week, even with the pickup in risk-taking. Traders are probably wary of another RBNZ cut as economic reports have been mostly downbeat, and the upcoming GDP release might also disappoint.
I haven’t set any entry orders yet, but I’ll try to hop in above the 1.9700 handle and aim close to the 2.0500 major psychological mark. Think a 400-pip stop is wide enough?
This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.