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Momentum Scorecard: British Pound Favored against EUR, NZD

Momentum Scorecard: British Pound Favored against EUR, NZD

Christopher Vecchio, CFA, Senior Strategist
Momentum_Scorecard_British_Pound_Favored_against_EUR_NZD_body_Picture_1.png, Momentum Scorecard: British Pound Favored against EUR, NZD

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TREND IN FOCUS: GBPNZD (D1)

Momentum_Scorecard_British_Pound_Favored_against_EUR_NZD_body_x0000_i1028.png, Momentum Scorecard: British Pound Favored against EUR, NZD

- GBPNZD’s bullish momentum has strengthened in recent days, with a score of +2.43 now, highlighted by continuity on the H1, H2, H4, and D1 timeframes.

- The pair has held above the 8-/21-/55-SMA structure for all but two days since May 1.

- Slow Stochastics (5,3,3) are suggesting that a near-term top may be in place near the 50% Fibonacci retracement of the 2011 high to 2013 low at N$2.0116.

- A Bullish Ascending Triangle may have formed on the daily chart; a false break lower is possible before support is found near the 8-SMA at 1.9754. A breakout eyes 2.0660/65.

*Trend definitions: “uptrend” is defined as 8-MA>21-MA>55-MA; “downtrend” is defined as 8-MA<21-MA<55-MA; a “trendless” market occurs when continuity is absent.

*Scoring methodology: there are seven time frames, ascending from m15 (15-minutes) to W1 (one-week). In ascending order, each pair is assigned a value from -7 to +7 based on the trend apparent on the specified time frame (I.E. a m15 uptrend equals +1, whereas a H1 downtrend equals -3). If neither an uptrend nor downtrend is present, the trendless timeframe receives a score of 0. These points are totaled and the average is reported on the right. The strongest uptrend would achieve a score of +4.00, while the strongest downtrend would achieve a score of -4.00.

--- Written by Christopher Vecchio, Currency Analyst

To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com

Follow him on Twitter at @CVecchioFX

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

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