Since mid May, the GBP/NZD rallied nearly 3000 pips!

16. July 2015 · Write a comment · Categories: EDGE Chart of the Day · Tags: , , ,

If you recall my blog post from mid May, the GBP/NZD is now reaching for that 3000 pip gain! Many of us captured portions, if not the lion’s share of this rally. But at this point you have to ask how far will it go? Expectations of a rate hike from the BOE has pushed the GBP higher over the last few days, and next week the RBNZ meets and some expect that they could (once again) cut rates. However, if expectations of a BOE rate hike is premature, and the RBNZ holds rates at 3.25% next week, we could see the GBP/NZD stall, especially at such critical resistance. Take a look at the monthly chart:

7-16-15GBPNZD1

On the monthly chart this pair is facing a major resistance trend line that spawns back from 2002. Also, you can see the previous support from December 2005 and February 2008 both come in just above 2.4100. Also, the RSI is extremely overbought as well.

7-16-15GBPNZD2

On the daily chart we are closing in on channel resistance. Also, daily RSI is divergent as well.

7-16-2015NZDUSD

One other clue I have is the NZD/USD, which is coming into a cluster of Fibonacci levels at the .6300-.6400 levels. These levels are from over 2 decades of price action.

Bottom line, the GBP/NZD may be a little tired here. I am not sure this will change the trend of the GBP/NZD, matter of fact, I suspect in the coming months the 2.4100-2.4200 level is broken, especially with the BOE follows the FOMC with higher rates into 2016. But, there may be a nice pullback/pause at current levels that I am willing to trade.

 

Blake Morrow

Chief Currency Strategist, Wizetrade

 

Disclaimer: I am looking to sell short the GBP/NZD above the 2.4000 level in the coming trading sessions

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GBP/NZD Weekly Inverted H&S Pattern Points to Almost 3000 Pips Higher!

11. May 2015 · Write a comment · Categories: EDGE Chart of the Day · Tags: , ,

If the long term (4+ year in development) Inverted Head and Shoulder Pattern plays out, the move could be nearly 3000 pips. This has been a highly anticipated move (by me and many others) for the last several months. We have attempted to break the neckline at 2.1050 a could times Today if finally happened. I suspect it is a combination of the UK election results and the Tory party claiming a majority in last week’s elections, and the fact that some local New Zealand banks are now seeing the possibility of rate cuts in the coming months. Also keep in mind, in 2014 the markets were pricing in over 2% of hikes, and the RBNZ only delivered 1% before stalling its rate hie cycle.

Here is the chart:

5-11-15GBPNZD1

 

Blake Morrow

Chief Currency Strategist, Wizetrade

 

Disclaimer: I have been long the GBP/NZD for the last 2 weeks and am adding to my long position currently

 

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EDGE Chart of the Day 1-13-15 GBP/NZD

13. January 2015 · Write a comment · Categories: EDGE Chart of the Day · Tags: ,

The GBP/NZD is in process of carving out an intraday inverted head and shoulders pattern. However there is a lot happening in this chart to assist. Take a look:

1-13-15GBPNZD

The 4 hour chart broke to new trend lows after coming out of a triangle consolidation pattern. That likely tripped a lot of “long stops” and signaled new shorts for trend traders. However, the reversal back above the 1.9350 level exposed the possibility of a short squeeze after a false break lower. The current inverted H&S pattern looks set to target the (purple line) down sloping trend line that comes in around 1.9880 after the move above 1.9615 (previous support) today.

Blake Morrow

Chief Currency Strategist, Wizetrade

 

Disclaimer, I have been building a long term “long” position in the GBP/NZD

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