GBPNZD - A Breakout Of The Range?
Analysis:
Taking a look at the charts we can see that price looks slightly choppy and like we're stuck in a range, however a trade has setup that is in accordance to our plan so we're taking it. Although price is in a range we can see that price is still heading to the upside slightly. We also have an upwards trendline which confirms that we are actually in an upwards trend. This means that we're only looking for long positions. We had some news that came out for the GBP this morning which was slightly negative causing an overreaction and price pulled back to an area that we're interested in. Whilst this news was negative we don't see this news event as that important and we also have a lot of other confluences pointing to bullishness so we don't really care about this small thing going against our idea. Whilst the area that we have marked out might not seem like an obvious level, to us it looks like a great place to enter at. We've seen this level hold in the past so we expect that it could hold again making it a possible support level, however this isn't the main reason why we like this level. The driving factor for why we have this area that we marked out is because of the added confluences which are lining up with. Firstly we have the 50% fib retracement level which we expect buyers to be sat at wanting to push price higher meaning that this favours our bullish thesis. Another confluence that we have is the upwards trendline. When we've seen this trendline be touched before we've seen it be respected and price has then made a move to the upside. Trading is all about history and patterns as they repeat themselves, so if this has happened in the past then its likely that this will happen again giving us another reason to be bullish especially from this area. The final technical confluence we have is the candle that we saw on Friday. We saw strong bullish momentum and we were expecting this to continue this week however after the news came out, price dropped back to our area of interest. Like we've said already we think that this is an overreaction so we expect to see the bulls step in again and push price higher, going in favour of our bullish thesis. Fundamentally as well the GBP is the 2nd strongest major currency whereas the NZD is the 5th strongest major currency so this massively goes in favour of bullishness on this pair. Taking a look at the COT data as well we saw an increase of 18K short positions and an increase of 24K long positions on the GBP, which is bullish, again favouring the long side. For the NZD however this is the opposite. We saw a decrease of 100 long positions and an increase of 2K short positions, indicating possible bearishness for the NZD, which goes in favour of our overall bullish thesis. We have the fundamentals pointing to bullishness and we have a strong place to enter from which is why we are bullish on this pair and expect to see a continuation to the upside.
Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read and responded to. We any comments at all so thank you!
Stay Safe - The JPI Team
Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does too. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
Taking a look at the charts we can see that price looks slightly choppy and like we're stuck in a range, however a trade has setup that is in accordance to our plan so we're taking it. Although price is in a range we can see that price is still heading to the upside slightly. We also have an upwards trendline which confirms that we are actually in an upwards trend. This means that we're only looking for long positions. We had some news that came out for the GBP this morning which was slightly negative causing an overreaction and price pulled back to an area that we're interested in. Whilst this news was negative we don't see this news event as that important and we also have a lot of other confluences pointing to bullishness so we don't really care about this small thing going against our idea. Whilst the area that we have marked out might not seem like an obvious level, to us it looks like a great place to enter at. We've seen this level hold in the past so we expect that it could hold again making it a possible support level, however this isn't the main reason why we like this level. The driving factor for why we have this area that we marked out is because of the added confluences which are lining up with. Firstly we have the 50% fib retracement level which we expect buyers to be sat at wanting to push price higher meaning that this favours our bullish thesis. Another confluence that we have is the upwards trendline. When we've seen this trendline be touched before we've seen it be respected and price has then made a move to the upside. Trading is all about history and patterns as they repeat themselves, so if this has happened in the past then its likely that this will happen again giving us another reason to be bullish especially from this area. The final technical confluence we have is the candle that we saw on Friday. We saw strong bullish momentum and we were expecting this to continue this week however after the news came out, price dropped back to our area of interest. Like we've said already we think that this is an overreaction so we expect to see the bulls step in again and push price higher, going in favour of our bullish thesis. Fundamentally as well the GBP is the 2nd strongest major currency whereas the NZD is the 5th strongest major currency so this massively goes in favour of bullishness on this pair. Taking a look at the COT data as well we saw an increase of 18K short positions and an increase of 24K long positions on the GBP, which is bullish, again favouring the long side. For the NZD however this is the opposite. We saw a decrease of 100 long positions and an increase of 2K short positions, indicating possible bearishness for the NZD, which goes in favour of our overall bullish thesis. We have the fundamentals pointing to bullishness and we have a strong place to enter from which is why we are bullish on this pair and expect to see a continuation to the upside.
Please feel free to leave any comments you have and like this idea if you agree with us. Any feedback or comments will be read and responded to. We any comments at all so thank you!
Stay Safe - The JPI Team
Disclaimer:
This does not constitute as financial advise. We are not responsible for any monetary loss that you endure. Trading is hard to be profitable with and we take losses just like everyone else does too. Our ideas won't always be correct which is why we urge you to always do your own analysis first before entering into the market but please feel free to use our analysis to assist you with yours.
Trade active:
With our entry requirements being met and our order being filled we are now long expecting to see price continue its move to the upside after the overreaction we saw to the news this morning.
Trade closed: target reached:
Trade Closed
(+1.05R) Made
After Trade Comments:
Whilst this wasn't the highest RR trade, it was still to plan and a great trade to catch. At the end of the day profit is profit. Price did go into a fair bit of drawdown but ultimately the GBP strength came through and pushed price higher, just as we called out in our analysis. Overall this was a nice little trade to catch. Onto the next one!
Stay Safe - The JPI Team
(+1.05R) Made
After Trade Comments:
Whilst this wasn't the highest RR trade, it was still to plan and a great trade to catch. At the end of the day profit is profit. Price did go into a fair bit of drawdown but ultimately the GBP strength came through and pushed price higher, just as we called out in our analysis. Overall this was a nice little trade to catch. Onto the next one!
Stay Safe - The JPI Team