FractalEyeZ
Long

Daybreak for the Pound/New Zealand?

FX:GBPNZD   British Pound/New Zealand Dollar
8 months ago
Good morning GBP/NZD, time to rise and shine :)

My case for a strong bullish reversal on this Extremely Valuable Pair {EVP} is due to the fact that: (1) It has completed a multi-month Harmonic Wave Formation and (2) the GBP/NZD is positively correlated with FX:AUDNZD             and that pair is trending very aggressively into a multi-year bullish uptrend due to both Australian Dollar             strength and a weakening New Zealand Dollar.

Time to get those Buy entries in ladies and gentlemen because the Bulls are out to play! I have no clue what the impact of a "Brexit" might do to the Pound but for now I'm surely long above 2.1170 due to NZD weakness.

Around May 02, 2016 we should have a clearer picture whether price will push higher or continue in a downtrend. Remember the "Brexit" decision is on June 23rd so until then we trade what we see on the chart. Around June 27th another harmonic time interval occurs so we shall see what happens.
8 months ago
Comment: A 3rd additional reason why it may be time to go long is the appearance of Bullish Divergence on the Daily chart which gives even further evidence to take the trade.

A key thing to remember is that divergence has been known to act as a "leading indicator" signalling a possible upcoming change in trend direction well in advance of the turn.

Here's the Daily chart view with Bullish Divergence:

snapshot
8 months ago
Comment: My Protective Stop has not been hit yet because it's from the Weekly chart perspective and is quite wide. With that being said, the Bears have pushed price down once again which now gives Bulls an entry price better than my 2.1170. The Pound may not be ready to climb against the Kiwi just yet but my above case for an uptrend over the coming weeks is still on the table, especially from the Weekly point of view.

There's strong S&R in this region from the past so let's see if the Bulls will use this area as a Support Floor and push up high from 2.08 or 2.09 levels or even lower. If price goes much lower then that may indicate that the market is attempting to form some type of structure like an Inverse Head & Shoulders formation before starting a new uptrend but we will have to wait and see. If so, I will close out and re-enter at a much better price.

Lastly, yes I will admit, these talks about "Brexit" are making me a little bit concerned about my GBP trade setups and they all may need to be re-evaluated! All we can do until then is, "wait and see"...

:)
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