GBP/NZD Breaks Channel Support
Justin Bennett | Nov 11, 2014 11:27AM ET
A pattern we've been watching for more than a week now is the GBPNZD equidistant channel that started forming in mid October. This pattern is best seen on the 4 hour chart.
GBPNZD opened lower to start the week and was unable to reclaim channel support yesterday. In fact the pair formed a bearish pin bar on the 4 hour chart after retesting former channel support, now acting as resistance.
An equidistant channel this clean is ideal as any break of channel support or resistance is often well-respected by market participants.
My longer-term bias here is bullish, however the recent break of channel support leads me to believe that we may see a pullback before the next leg higher.
This may provide traders with an opportunity to enter short before the next support area comes into play. Former channel resistance seen on the daily chart below gives us a good idea of where buyers may find a renewed interest.
Summary: Currently waiting for the day to close. A bearish rejection from former channel support may provide traders with an opportunity to enter short. Key support comes in around 2.0240.
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