Closed above major support on its way to Butterfly completion
$GBPNZD rallied 500 pips last week after touching the 2.4 support zone.
It came real close to complete the bearish Butterfly pattern shown in the chart but failed to trigger my short entry as it was stopped by the 61.8 Fib level (from August's spike)
The 2.4 support zone was recognized as last week's focus zone on last week's Weekly Markets Analysis newsletter.
Now, as $GBPNZD settled above 2.43, this zone become this week's support zone and potential buy zone for a continuation trade towards 2.47 and the completion of the Butterfly pattern.
2.43 is, as clearly shown from the chart, a structure zone and in addition, the 50 SMA line should also provide support that may help push $GBPNZD towards the target level
The required stop loss for the bullish scenario is quite wide (200-300 pips), but so does the potential reward (up to 400 pips)
You can try to find smaller reversal patterns on smaller time frames near 2.43 that will allow a tighter stop loss.
The interesting bearish scenarios for this pair is if and when the pair will complete the Butterfly pattern.
$GBPNZD is overbought (daily chart) with bearish divergence and 2.47 might just be the pattern that will end its huge bullish run.
Just look at the great R/R you get for the bearish scenario - Definitely worth waiting.
This analysis is part of the Weekly Markets Analysis newsletters
To read more interesting technical reviews - goo.gl/4z09V2
To subscribe to the newsletters - goo.gl/HXjCPV
It came real close to complete the bearish Butterfly pattern shown in the chart but failed to trigger my short entry as it was stopped by the 61.8 Fib level (from August's spike)
The 2.4 support zone was recognized as last week's focus zone on last week's Weekly Markets Analysis newsletter.
Now, as $GBPNZD settled above 2.43, this zone become this week's support zone and potential buy zone for a continuation trade towards 2.47 and the completion of the Butterfly pattern.
2.43 is, as clearly shown from the chart, a structure zone and in addition, the 50 SMA line should also provide support that may help push $GBPNZD towards the target level
The required stop loss for the bullish scenario is quite wide (200-300 pips), but so does the potential reward (up to 400 pips)
You can try to find smaller reversal patterns on smaller time frames near 2.43 that will allow a tighter stop loss.
The interesting bearish scenarios for this pair is if and when the pair will complete the Butterfly pattern.
$GBPNZD is overbought (daily chart) with bearish divergence and 2.47 might just be the pattern that will end its huge bullish run.
Just look at the great R/R you get for the bearish scenario - Definitely worth waiting.
This analysis is part of the Weekly Markets Analysis newsletters
To read more interesting technical reviews - goo.gl/4z09V2
To subscribe to the newsletters - goo.gl/HXjCPV