GBP/NZD 4H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
At first it may seem that GBP/NZD is likely to extend its latest sell-off, but there are good reasons why the pair is not going to fall below 2.02. The Sterling has recently broken the support trend-line, and soon afterwards it formed a well-defined channel, the lower bound of which the price is currently testing. The rally from 2.02, however, is not expected to be a bullish correction within the pattern, since demand at this particular level is also implied by the monthly S1 and the major trend-line that connects 2013 and 2015 lows, but a reversal. As if it were not enough, there are also massive supports at 1.9970 and also circa 1.93, created by the trend-lines that once formed a falling wedge (Jul 2015—Apr 2016).
© Dukascopy Bank SA
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