GBP/NZD 4H Chart: Ascending Triangle

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Despite the inability of GBP/NZD to overcome 2.40 since the initial test of the resistance on July 16, we retain a bullish outlook on the Sterling. First, an ascending triangle is a continuation pattern, and starting from the second half of April we have been in a strong up-trend. Secondly, a majority of the technical indicators, especially in the four-hour and weekly charts, is giving ‘buy' signals. Accordingly, the base case scenario is an eventual breach of 2.40 and a subsequent rally. The first target will be at 2.42, where the weekly R1 merges with the monthly R1. In the meantime, the SWFX sentiment is distinctly bearish: 38% of open positions are long and 62% of them are short.
© Dukascopy Bank SA
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