This pair already completed its breakout and retest from a symmetrical triangle pattern. Do you think it’s too late for me to hop in?
Long GBP/NZD Idea
I’m keeping a bullish bias on the pound as the currency is picking up on stronger BOE rate hike expectations and positive Brexit developments. Meanwhile, the Kiwi appears to be most vulnerable among the commodity currencies if risk aversion returns.
Price already moved past the triangle resistance and made a retest, with a teeny-tiny double bottom to boot. I’m thinking I can still try to catch this momentum as the pair has some room to climb before hitting the next ceiling on the swing high.
Stochastic is already hitting overbought territory, though, so I’m on the lookout for a small dip to enter at a slightly better price. I’ll set my stop below the triangle bottom or 1.9000 major psychological level to give me some leeway to cut in case GBP/NZD drops like a rock for some reason.
The U.K. has a bunch of top-tier reports lined up this week, including the CPI and jobs figures. This could continue to shape BOE tightening expectations, with upbeat data supporting the chances of a hike in their next policy meeting.
New Zealand has its quarterly CPI report due, too. This could yield big moves for the Kiwi, depending on how the actual results turn out. So far, the RBNZ doesn’t seem to be warming up to the idea of hiking just yet, so weaker than expected inflation figures could confirm this view.
Should I wait for these reports to come out or take the risk and jump in at market?
See also: Q4 2017 Trading Performance Review
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