(Sell) GBPNZD Technical Analysis for May 3, 2018
Hello Traders,
It’s no doubt that the GBP has been on the upper edge for the better part of last year. Well, in my view, it might continue with its trajectory especially if there is an interest rate hike in the future. However, when we take a purely technical view, we expect GBP to lose ground and correct in the coming days.
A top down approach can provide a proper mirror for my forecast. Note that we already have a stochastic sell signal from the overbought territory complete with bear pin bars following periods of consolidations in the weekly chart. Besides, this week has been purely bearish and we can see that long upper wick showing that indeed sellers are in charge.
If it remains this way then we expect sellers to break below that support trend line in the weekly chart as NZD bulls aim to test 2018 lows at around 1.86.
In the 4HR chart, sellers are currently testing the main support trend line and after periods of lower lows, the GBP might recover or as well break below that support line. Because the higher time frame takes precedence, it’s likely that sellers might lead the charge and in that case, we shall be waiting for that break below to happen before committing to this trade.
As such, my GBPNZD Trade plan will be as follows:
Sell Stop: 1.92
Stop Loss: 1.94
Take Profit: 1.86
Let me know what you think. Have a good trading day!!
It’s no doubt that the GBP has been on the upper edge for the better part of last year. Well, in my view, it might continue with its trajectory especially if there is an interest rate hike in the future. However, when we take a purely technical view, we expect GBP to lose ground and correct in the coming days.
A top down approach can provide a proper mirror for my forecast. Note that we already have a stochastic sell signal from the overbought territory complete with bear pin bars following periods of consolidations in the weekly chart. Besides, this week has been purely bearish and we can see that long upper wick showing that indeed sellers are in charge.
If it remains this way then we expect sellers to break below that support trend line in the weekly chart as NZD bulls aim to test 2018 lows at around 1.86.
In the 4HR chart, sellers are currently testing the main support trend line and after periods of lower lows, the GBP might recover or as well break below that support line. Because the higher time frame takes precedence, it’s likely that sellers might lead the charge and in that case, we shall be waiting for that break below to happen before committing to this trade.
As such, my GBPNZD Trade plan will be as follows:
Sell Stop: 1.92
Stop Loss: 1.94
Take Profit: 1.86
Let me know what you think. Have a good trading day!!
