GBP/NZD 4h Chart: Double Bottom

Source: Dukascopy Bank SA
© Dukascopy Ban SA
The GBP/NZD currency pair is attempting a trend reversal, as shown by the double bottom at 1.7747, suggesting that the price could go up in the nearest future. The 1.8075 mark is where the price lies right now, hovering between the 100-period and 55-period SMAs. As volatility stays quite low in August, SMAs and Bollinger Bands are tightly clustered around the currency, providing intermediate supports and resistances. The next target in case of an uptrend therefore lies with the 100 period SMA at 1.8114, followed by the BB at 1.8143 and 1.8168 (daily R1) consequently. The 200-period SMA will be then tested at 1.8321, but the 1.9056 mark should be crossed for the trend to be indeed reversed. However, an ascending wedge pattern has been forming over the last two weeks, causing doubt in whether a reversal will in fact take place. In case the trend does not reverse and a movement down continues, the 55-period SMA and lower BB at 1.7985/8006 will be tested, followed by the daily PP at 1.7957, before the plunge to hit the S1 at 1.7776 and the double bottom mark at 1.7747. Aggregate technical indicators assert that a continuation of the movement down could be in fact quite likely.
© Dukascopy Bank SA
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