GBP/NZD may fall back to 2.27 with negative divergence

FX:GBPNZD   British Pound / New Zealand Dollar
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The GBP/NZD cross has staged an impressive 12-week rally, the second half of which has mostly been through selling pressure on the NZD following the RBNZ's recent rate cut decision. The daily chart is currently suggesting a downside risk as the RSI is starting to form a negative divergence. This divergence still has to be confirmed, and a daily close below 2.218 today would increase significantly the likelihood of such a confirmation. If this divergence is indeed validated, prices should fall back to around 2.27 by early next week. It's imperitive that the GBP/NZD breaks below 2.31 in the next 2-3 days for this divergence to really allow traders to remain against the overall trend here. I wouldn't be keen on holding shorts if prices don't break below this level fast enough.
The target was hit early this morning. Things were a little complicated at the start of the week (Tuesday morning especially), but this was overall a decent trade setup.
Do you see reversal on this pair ?
That's the idea of the trade suggested at the beginning of the week. But to really have a breakdown over the medium term, 2.27 will need to break fairly quickly (by early next week).
Here's that wedge.
Things are now shaping up pretty good. Prices broke a wedge support this morning.
My bearish scenario is definitely invalidated now.
AdrianRaymondFX AdrianRaymondFX
I might have been a little too quick on that last call. Prices are falling back to lows of the day.
Prices have hit fresh highs this morning, but it's not necessarily clear if this invalidates the divergence. As I see it now, there's a much lower probability that this divergence will be validated.
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