GBP/NZD Key Points
- Higher time frame, bullish channel.
- Reversal candle into horizontal resistance zone.
- Chance to preempt channel breakout.
GBP/NZD Technical Analysis
With markets closed for the weekend, I've got something different for a Saturday.
While you might have just got the signal to trade GBP/NZD short after the channel breakout, I wanted to highlight a possible chance to preemt the breakout and possibly get an early entry on the trade.
Take a look a the GBP/NZD daily chart below:
You can see that price formed that massive pin bar, right into horizontal resistance. The fact that price was rejected so hard here, is your first signal for a potential top in the channel and that move lower might be coming.
Price then formed a bullish, daily candle, before continuing lower. This is an area of short term support that we could look to be retested as resistance for a short entry out of.
A retest that happened, with anothe juicy candle spike into the zone, before being rejected hard to the downside.
It's on the back of this price action that we see the channel breakout and short signal triggered.
So while there is probably more downside to come now that price has broken out of the channel, the earlier price action that I've highlighted above not only strengthens the bearish case, but also is an early entry setup to look out for when channels form.
Best of probabilities to you.
Dane.
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