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GBPNZD Long Scalps at Risk Sub 2.0850- Reversal Play?

GBPNZD Long Scalps at Risk Sub 2.0850- Reversal Play?

Michael Boutros, Strategist

Talking Points

GBP/NZD Daily

Chart Created Using FXCM Marketscope 2.0

Technical Outlook

  • GBPNZD rally now coming into key resistance at 2.0834/48 (bearish invalidation)
  • Long scalps at risk below this level zone
  • Breach targets resistance objectives at 2.0910/34 & 2.1055
  • Interim support at 2.0650 (near-term bullish invalidation)
  • Support break targets 2.0535/59 & key support at 2.0351/62
  • Daily RSI coming into 60-resistance, break keep topside in focus
  • Break sub-50 with a move below the weekly ORL reinforces reversal play
  • Event Risk Ahead: RBNZ Interest Rate Decision

GBP/NZD 30min

Notes:The focus is on near-term resistance just higher with divergence in the intra-day momentum signature warning of possible exhaustion. The pair has continued to trade within the confines of an ascending pitchfork off last week’s low with a breach above this resistance region risking a continuation of the broader up-trend.

Bottom line: we’ll be looking to sell rallies / short-triggers while below the highlighted resistance region just below 2.0833/48 with a break sub-2.0650 needed to reaffirm the reversal play. Such a scenario targets subsequent support objectives into the 2.0535/59 & 2.0443. More significant support rests lower at 2.0351/62.Note that this is a long-range setup with a quarter of the daily ATR yielding profit targets of 50-55 pips per scalp. Caution is warranted heading into the end of the week with a break of the 2.0650-2.0850 range to affirm our near-term directional bias.

* It’s extremely important to give added consideration regarding the timing of intra-day scalps with the opening ranges on a session & hourly basis offering further clarity on intra-day biases.

Relevant Data Releases

Other Setups in Play:

---Written by Michael Boutros, Currency Strategist with DailyFX

For updates on this scalp and more setups follow him on Twitter @MBForex

To contact Michael email mboutros@dailyfx.com or Click Here to be added to his email distribution list

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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