DanV
Short

GBPNZD - POTENTIAL SHORTING OPPORTUNITY FOR RETRACEMENT

FX_IDC:GBPNZD   POUND STERLING / NEW ZEALAND DOLLAR
In my previous GBPNZD             chart I suggested a potential larger contracting triangle and associated long trade highlighted has developed really well the low. However the price action has now overshot the requirement for contracting triangle upper limits (see chart link below)

Therefore, the contracting triangle is no longer valid, nevertheless in the longer term the outlook for this pairs remains is very bullish , as noted in the comments accompanying the chart.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. Bearish if it is found at the top of the major move.
2. Bullish 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 resistance level and several Fib confluence along with accompanying RSI 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.

Technical Summary:

1. As noted above not sure if this "megaphone" should be an expanding ending diagonal or leading diagonal, 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 RSI 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.

DanV
danv-charting.com
DanV MOD
2 years ago
GBPUSD H4 Chart referred to
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DanV MOD
2 years ago
GBPUSD Weekly chart
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mkdeep04
2 years ago
GM .... with u gbpnzd
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DanV MOD mkdeep04
2 years ago
Good Morning. Great to hear it, so we are in good company. lol
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GcNaif MOD
2 years ago
nice, thanks dan ,
Short on bearish AB=CD completion
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DanV MOD GcNaif
2 years ago
You are welcome. Thanks for sharing your chart. looks promising.
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DanV MOD
2 years ago
GBPNZD Hourly chart
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Excellent insights, to which I subscribe.
I'd wait and just buy the end of said correction when it occurs, in case this is indeed an expanding leading diagonal wave 1 of sorts.
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DanV MOD IvanLabrie
2 years ago
Thanks for the compliment.

Yes indeed that would be more conservative and still hold potentially very profitable move to the upside that could last several months even a year. Even of this just turns out to be Leading diagonal wave A, once we have the retracement wave B , next would be wave C which is likely to be very powerful as they are always impulsive.
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IvanLabrie PRO DanV
2 years ago
Yes, I'd rather trade all 1-2/A-B conclusions in general.
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DanV MOD
2 years ago
UPDATE: This pair went little beyond initially anticipated but still with in the limits and it seem that the anticipated top could be in place. Safe to enter short on meaningful retracement with recent high as the ultimate stop. Here is the updated daily chart
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IvanLabrie PRO DanV
2 years ago
EURNZD was simply a safer bet until release of UK data and Carney speaking today...I'm sure the eurozone shorts will start working after NY opens today.
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DanV MOD IvanLabrie
2 years ago
Yes indeed. But now both UK & NZD related data are out it could commence setting new course.
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HamedAghajani PRO DanV
2 years ago
With today's spike, will you consider the interpretation still valid? Thanks, Hamed
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DanV MOD HamedAghajani
2 years ago
Yes, I think so. Often on larger time frame charts like this you often do get seeming failure.

The first entry did not give the run we anticipated, but today if you look it has attempted to breakout and seem s like it has failed. If correct the we should see stronger decline. Also compared to GBPUSD it has retraced 61.8% of previous decline. So I would not give up just yet but would keep eye for managing risk. Downside could be like 50% retracement of even all the way to previous low. I have entered short again and now stops are at BE on 2/3rd position. Last 1/3rd will enter on confirmation.

Thanks for your question and hope this helps
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HamedAghajani PRO DanV
2 years ago
Yes, I only entered short today on the test of previous high, and later remembered you had a analysis on the pair. Just wondered what your updated opinions were.
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DanV MOD HamedAghajani
2 years ago
Excellent. I still have no reason to abandon it yet. NZD has been sold off heavy and GBP has bounce so a mean reversion would suggest NZD t make some retracement rally whilst GBP correct. So I am still hopeful plus RSI now have very pronounces divergence with price at level where it seems to have failed to breakout. So all seems to line up.
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HamedAghajani PRO DanV
2 years ago
You are right. Mine analysis was very simple, and based on the test of upper channel. Which I just noticed you had in charts;
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DanV MOD HamedAghajani
2 years ago
Yes I agree and if you note RSI divergence which would be more noticeable on H4.
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GcNaif MOD DanV
2 years ago
i am with you on this, if you see NU weekly chart, its is right now at support and the price is reversing from it and the price is also back n above last weeks low , all this indications are pointing towards the start of the good retracement on NU and i guess this could be great level to go long on it, ,so if NU does reverse for the move up then till euro session we have a good opportunity on GN short (n we all know when GN move how fast it moves)
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DanV MOD GcNaif
2 years ago
Yes good point and great chart. Thanks for sharing.
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DanV MOD
2 years ago
It has been somewhat frustrating as the top we were looking for didn't form cleanly and continued to chop higher. Such action at significant tops do often occur and repeated attempts that fail to go your way could put many off before the reversal turn actually takes place.

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:
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DanV MOD
2 years ago
Hi Friends, After tonight event, sadly this short is now abandon as the larger trend noted when publishing this charts prevailed.

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.
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anwar.mashni DanV
2 years ago
This pair is heading towards 2.4 longer term in my opinion
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DanV MOD anwar.mashni
2 years ago
Yes agreed in fact longer term even higher levels are possible like 2.7 or so. Thanks for your comment
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anwar.mashni DanV
2 years ago
thank you Dan! looking forward to seeing your next trade on this pair, I've been monitoring it very closely. Cheers!
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DanV MOD anwar.mashni
2 years ago
Me too. You are welcome.
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