GBP/NZD is currently seen to be rising. Therefore, wait for short-term sell opportunities when the price tests the supply zone.

Hi fellow traders! GBP/NZD is currently observed to be undergoing a short-term bullish correction from a bearish trend. The short-term bearish trend began to form after the market perceived the BoE governor's speech yesterday as tending towards dovishness. Therefore, look for short-term sell opportunities when the price undergoes a correction to test the supply zone.

gbpnzd

 

Analysis and Recommendation

Let's take a look at the following GBP/NZD H1 chart below: 

gbpnzd 2

From the H1 chart above, it has been pointed out that GBP/NZD is undergoing an upward correction. The corrective movement that is happening now is predicted to approach the supply zone around 1.9410 - 1.9505. Therefore, wait for a short opportunity when the price successfully approaches the supply zone.

However, be aware if GBP/NZD continues strengthening and breaking through the 1.9505 level! If that level is successfully breached, this pair is expected to continue its rally towards higher supply zones around 1.9640 - 1.9734 if there is a confirmed breakout and bullish signal.

Here are two trading scenarios to consider:

  • Therefore, set a short position at 1.9410 when the price manages to enter the supply zone and a bearish signal confirms it. Stop loss may be positioned at 1.9505, while the profit target is at 1.9195.
  • Alternatively, set a long position at 1.9505 when a significant breakout signal confirms it. Stop loss may be positioned at 1.9410, while the profit target on 1.9640.

Keep in mind to always use risk and money management before trading! In addition, to make use of trailing stops, don't forget to exit the market as soon as you find a reversal signal!

GBP/NZD key levels:

  • Resistance: 1.9734, 1.9640, 1.9505, 1.9410
  • Support: 1.9195, 1.9090