With Brexit concerns still in play, I’m looking for another chance to short the British pound. Here’s what I’m looking at on GBP/NZD’s 4-hour forex chart.
I’m seeing a neat falling wedge pattern but I’m not quite sure where to short just yet, as I prefer waiting for a pullback to the resistance but I don’t want to miss another big move like I did for EUR/GBP and GBP/CAD.
For now, I’m eyeing a potential short below the recent consolidation at 2.1000 or on a test of the wedge resistance around 2.1600, which is right around an area of interest.
Stochastic is on the move up for now, which is probably a sign that I should stay patient in waiting for a better entry area. I’ll be ready to hop in with a small position once the oscillator reaches the overbought region and turns lower, but I’ll need to set a wide stop beyond the wedge resistance so I have room to add another position right there.
Market sentiment has been really fickle lately so commodity currencies like the Kiwi might be in for a volatile ride, but I’m feeling pretty confident that the pound is in for more forex losses as Forex Gump noted in his comparison of the Brexit and the Scottish referendum.
Meanwhile, data from New Zealand has been somewhat positive (visitor arrivals, credit card spending, employment) so I’m thinking the Kiwi could keep advancing, but this could hinge on the top-tier catalysts next week, such as Chinese PMI and the GDT auction.
I’m gonna watch how GBP/NZD reacts to the 2.1200, 2.1500, and 2.1700 levels to see if any reversal candlesticks give me a signal to short. Man, I wish I had more than just one good eye!
Got any forex setups on the crosses that you think I should be looking at?
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