DanV
Long

GBPNZD-POTENTIAL TRIANGLE FORMATION OFFERING BULLISH TRADE ENTRY

FX_IDC:GBPNZD   POUND STERLING / NEW ZEALAND DOLLAR
BULLISH TRADE ENTRY IMMINENT (UPDATE)

NOTE:
I am sure there are several economic & fundamental factors at play in this pair as is always the case in all financial instruments. However, I am not considering these and are analysing price chart from technical perspective alone.

It is hard to make any long term accurate projections using any form of analysis, so price path illustrated on the chart are not going to hold and it should be considered as idealistic schematic diagram for anticipating larger cycle and as a guide in general direction.



Chart Observations

Whilst holding bullish bias overall for some time, I was puzzled by its inability to break above resistance recently resulting in complete review and here is a summary of my observations as follows:

On larger time frame we have possible pitchfork which has defined the price path relatively well and it suggests an over all bullish longer term trend for this pair. (See 3day & daily chart price charts below for details)

However, having moved of the low to September 2014 high it has gone into consolidation phase.

Since September high of 2014, it seems so far that the price has been moving in a wider 3 swing zigzags and possibly forming what looks like a contacting triangle (this configuration Elliotwave is called 3-3-3-3-3 triangle, which is a trend continuation consolidation).

If this interpretation is correct, then we can note that Wave A has completed and are in final stage of completing Wave B, having declined from February 2015 high in abc zigzag and are in possible wave 5 of C which could complete around 1.9350 - 1.93 area before reversing to the upside.

Bullish trade could be planned and executed with necessary price confirmation in that zone with sensible money management. Previous structural supports could be used to plan for initial stop loss placement. Though it must be noted that this pair is very volatile and tight stops is not advisable so to manage wider stop position size must accordingly be kept small.

It is interesting that the triangle formation is relatively large offering several long and short swing trades as it progress.

Technicals:
1. Approaching lower range of the potential triangle.
2. Larger Wave B is nearly complete with minor wave c of abc zigzag in final stage ie wave v of 5 soon to complete.
3. Rising trendline and previous structure lows in close proximity where low is anticipated around 1.9350 -1.93.
4. Several fib retracement and extensions and projection proving confluence in the area.
5. Potential low could form soon lining up with Fib time ratio.

As, always please do your own analysis for your requirement. Select to follow me and the charts for notification of any updates. If you like the analysis show this by thumbs up and constructive comments or alternative ideas for all to learn from.

Thanks for taking the time to view my analysis.

DanV
danv-charting.com
http://www.danv-charting.com
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DanV MOD
2 years ago
Larger time frame with pitchfork showing inter action with structural support
snapshot
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Yahia.Awes
2 years ago
D would be a nice short.
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DanV MOD Yahia.Awes
2 years ago
Hi thanks for your comment, don't quite get it though.
Are you expecting it to break down from the support area shown on the chart?
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Yahia.Awes DanV
2 years ago
I mean short from D to (B).
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DanV MOD Yahia.Awes
2 years ago
Ahh I see what you mean. Yes indeed if this turns out to be a triangle that I am anticipating.Thanks
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SunnyBTC PRO
2 years ago
Great chart Dan and an immense amount of pips to me made over time. Taking this trade... thanks!
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DanV MOD SunnyBTC
2 years ago
YW. This is monster of pair in terms of pip movements one on the move. So main thing with this is good entry and keeping position size in proportion to account to ensure risk is managed.

But agree, should it follow the script, would be awesome.
+1 Reply
tcas
2 years ago
Great analys! What about target?
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DanV MOD tcas
2 years ago
Thanks for your compliment and question.

I tend no to give out exact targets specially on such a long term move where the actual path and lows & highs of the swings in a zigzag could vary and not possible to pinpoint these.

However, general locations of entry and overall move is indicated by the geometric shape or pattern should serve as a guide. So in this case it is follows as anticipated for a zigzag move up we could be looking at 2.06 -2.07 area.

Hope this helps.
Reply
nigwe DanV
2 years ago
Hi, DanV. Thanks for your great analysis always. Might it be time some pullback now, or do you think the next week will see a continuation of the bulishness up to 2.06 - 2.07?
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DanV MOD nigwe
2 years ago
Hi, thanks for your compliment and question.

I think that the price has as you noted reached a level which previously was support that could now prove potential resistance and that on smaller time frame suggested that we might be forming short term top which could allow some retracement to 1.9750 -1.9850 area as shown in the chart below
snapshot
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DanV MOD DanV
2 years ago
If however we only get very shallow retracement then we could go to 2.02 area before a meaningful retracement could develop. Hope this helps.
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nigwe DanV
2 years ago
I was having the same thoughts. This is quite helpful. May be good to watch the markets and wait for retracement to complete before going long again. Thank you for the insight.
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DanV MOD nigwe
2 years ago
Yes indeed. You are welcome.
Reply
DanV MOD
2 years ago
Whilst this chart served us well and had excellent long trade, the price action has now nullified the triangle idea hence this charts has been retired and new updated charts published.
GBPNZD - POTENTIAL SHORTING OPPORTUNITY FOR RETRACEMENT
Reply
AgentSmith DanV
2 years ago
On a weekly perspective this is the 4th attempt to break the 2.1050 handle. I'm in no way interested in shorting at these levels, particularly if we close above there on Friday evening. Having said that, given the tricksy nature of FX I wouldn't be surprised if we see some backpeddling below that major inflection point. Either way I'm personally only looking on the long side here.
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