GBP/NZD 4H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
The Pound is depreciating against the New Zealand Dollar in a descending channel. The channel is a result of the rate meeting with the upper trend line of a large scale descending channel. At the moment, the rate is set to decline until the 2016 low level of 1.6708, where it is bound to find some support. However, the support is most likely going to be temporary, as it is unlikely that such a short term small range descending channel will persist for long. In the meantime, SWFX market sentiment is 66% long. That indicates that the rate was overbought, when it hit the upper trend line of the long term descending channel. It is possible that by the time the rate reaches the 2016 low level, the trader sentiment will be neutral.
© Dukascopy Bank SA
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