GBP/NZD: Consolidating After Major Channel Breakout
Dailyfx | Feb 10, 2015 12:23PM ET
- GBP/NZD consolidating outside of multi-month channel
- Consolidation working its way towards a triangle formation
- ~21050 is major monthly resistance over past 3+ years
Over a week ago, I pointed out a symmetrical price & time relationship in GBP/NZD, which suggested a pullback was in order, however, instead of a material pullback we are now seeing a constructive pullback/consolidation. Upon zooming in on the 4-hr timeframe we can see the consolidation quickly taking the shape of a symmetrical triangle. This is taking place after a significant breakout of a multi-month channel, so considerable upside could come from this should a key monthly level get cleared...
On a breakout above the top-side trend-line of the triangle I will be looking for 21054 (September 2014 high). This price level, to the exact pip, was also the high in 2012 and 21045 was yearly high in 2011. Should GBP/NZD break out of the triangle and hold above 21054, my big picture bias for a major rally this year will be strengthened considerably. For now, though, the focus is on seeing whether or not we can maintain this bullish posture and rise out of a short-term pattern towards critical long-term levels.
--- Written by Paul Robinson, DailyFX Research
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