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I’ve had my eye on this GBP/NZD ascending channel last week, hoping to catch the upside momentum. I’m seeing a better entry on a pullback this time.

Long GBP/NZD Idea

The pair is also trending higher above a rising trend line on its 4-hour time frame, and it looks like price is in the middle of a correction. Looking at the Fib tool shows that the 61.8% level lines up with the trend line and area of interest around the 1.9450 minor psychological mark.

Stochastic has some room to head south, so price might follow suit. However, the oscillator is also dipping into the oversold region to signal exhaustion among sellers and a possible return in bullish pressure soon.

GBP/NZD 4-hour Forex Chart
GBP/NZD 4-hour Forex Chart

The pound could be in for a lot of volatility this week as the U.K. Supreme Court is due to give its ruling on the prorogation. Declaring that PM Johnson’s decision to shut Parliament down is unlawful could give lawmakers time to block a “no deal” Brexit from happening.

However, the Kiwi isn’t one to get left behind as the RBNZ is scheduled to make its monetary policy statement. No actual policy changes are expected since the central bank already cut rates by 0.50% in their earlier decision, but dovish remarks might still drag the currency down.

I’m looking to go long around the 1.9475 mark, with a stop at 1.9275 and a target at 1.9975. This should give me a 2.5-to-1 R:R on the play.

What do you guys think?

Happy

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