Therefore, the contracting triangle is no longer valid, nevertheless in the longer term the outlook for this pairs remains is very , as noted in the comments accompanying the chart. If fact many have been noticing larger inverse Head & Shoulder pattern forming which could eventually lead to much higher prices.
Taking a fresh view of the entire price action to date since the April 2013 low another picture appears. Not entirely sure how to label this but suffice to say that it is an incredibly clear megaphone pattern which can be:
1. if it is found at the top of the major move.
2. at the beginning of the move as is the case, in this instance.
However upon completion of this pattern a correction would be in order.
Few points to note are:
1. The price has poked above September 2014 high possibly triggering many stops and could now be vulnerable for a retrace.
2. Most of the recent rise of the low has been fuelled by GBPUSD strength and NZDUSD weakness
3. GBPUSD might also be at critical level with poking above its previous and several Fib confluence along with accompanying divergence suggesting a retracement might develop sooner rather than later (see chart below).
4.Part of the rise of GBPUSD was accompanied with UK election outcome which now is known and could suggest that now it might take a step back.
1. As noted above not sure if this "megaphone" should be an expanding or , but it is clearly seems complete now, which, I have labelled ABCDE but it could have been 1,2,3,4,5. The conclusion is the same in that short term top might develop here and could retrace, may be back to 2.0 or deeper.
2. Price has poked above April 2014 high and may have triggered many stops
3. Level reached also has several Fib projection and extensions with confluence in that zone.
4. Minor divergence on hourly (see chart below)
5. GBPUSD might also be making intermediate top (see chart below)
6. NZDUSD related new out tomorrow might enable a retrace of NZDUSD from oversold level.
However, this is a counter trend trade, hence of higher risk category and should be kept in mind in considering this trade.
Warning: This is my interpretation of price action using TA approach that I consider helps me most, but could be completely wrong. Therefore as always, do your own analysis for your trade requirement and ignore my views.
For those who appreciates my analysis, select to follow me and the chart for notification of future updates. Indicate you like my analysis by thumbs up, comments and sharing it with others. If you have an alternative idea then please be constructive and share for all to learn from.
Thank you for taking the time to read my analysis.
So whilst retiring this chart for now, I suspect all the stops have been taken out so some sort of retrace will take place. Will wait for clarity to get long as that will be the main trend for quite some time.
Thanks for your support.
However here is the updated charts with minor label adjustments still telling the same story and I would consider shorting on confirmation or on retracement of the recent decline on shorter time frame. Here is the chart: