- GBP/NZD at pivotal support ahead of EU Summit / UK Retail Sales
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
Technical Outlook: GBPNZD is testing a critical support confluence at 2.1438-2.1567 – a region defined by the 100% extension of the December decline, the 61.8% retracement of the 2015 trading range and the 2016 yearly open. Note that daily RSI has continued to hold above the 40-threshold, suggesting that the downside momentum may be waning here.
Near-term resistance stands at the convergence of yearly high-day close & channel resistance at 2.2032 backed by a Fibonacci confluence at 2.2281/83(broader bearish invalidation). A break lower keeps the broader downtrend in focus targeting the 2014 high at 2.1055 and the 2014 high-day close at 2.0910.
Avoid the pitfalls of near-term trading strategies by steering clear of classic mistakes. Review these principles in the "Traits of Successful Traders” series.
Notes: The short-bias is at risk near-term & we’ll be looking for long-triggers while above 2.1555/65 with our bullish invalidation level set at 2.1506. Topside resistance targets eyed at 2.1721, 2.1786 & the weekly open / 76.4% retracement at 2.1867/893. Keep in mind this is wider range setup with a quarter of the daily average true range (ATR) yielding profit targets of 74-78 pips per scalp.
UK Retial Sales figures are on tap for tomorrow with current forecasts calling for a rebound in household spedning. However headlines coming out of the EU Summit may take center stage as the UK tries to broker a deal to retain its membership- expect some volatility.
Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount!
Check out SSI to see how retail crowds are positioned as well as open interest heading into February trade.
Get DailyFX’s Top Trading Opportunities of 2016 Here
Relevant Data Releases
Other Setups in Play:
- AUDUSD Opening Range Break Pending Ahead of Aussie Employment Data
- Opening Range Setups in CADJPY Ahead of Key Inflation Data
- EURGBP Reacts to Slope Resistance-Reversal Setup Targets Weekly Open
- NZD/USD Shorts Favored Sub- 6759- Range Break to Clear the Way
- Webinar: Dollar Prospects Hinge on Yellen- EUR, GBP Setups Favored
---Written by Michael Boutros, Currency Strategist with DailyFX