Who would win the fight between GBPNZD Bulls and Bears? BEARS!!!

Who would win the fight between GBPNZD Bulls and Bears? BEARS!!!


Dear friends
Welcome to this FX review. I would like to thank you for your kind words and comments on both my EU and UJ calls. Also if you like this analysis and you find it useful please LIKE and leave a COMMENT. That motivates me to do more analysis for you.
As you have seen in my recent update on GBPNZD             call I closed the trade for 150 pips of profit. The reason for that is because I see some possible trend reversal in both GBP and NZD. Remember in FX you lose money if you are wrong in your prediction for both nominator and denominator currencies! Even if you are wrong with one of two you will be still at break even.

Anyway let’s get into the business, in the review I will review the followings:

A) Bulls versus Bears
B) British Pound currency outlook
C) New Zealand currency outlook

A) Bulls versus Bears

First of all look at this weekly price action on GBPNZD             .

As it shown the pair had attempted 4 TIMES to bounce off the EMA 14 and EMA 21 and each time it was failed to go higher, until the last time that was just this week.

Also see the fight between the Bulls versus the Bears. In fact the LONG WICKS indicate that the Bulls controlled the ball for part of the game, but lost control by the end and the Bears made an impressive comeback. Just look at the size of the week for the last candle and 2 weeks ago.

Also there is a wedge formation as you can see below. The price has not completed the rotation and had an under-shoot. This failure is a sign of bearishness.

You can even draw the wedge like this and it is even supper bearish

Also if you draw a modified Pitchfork you can see another failure of rotation in the mdi             band.

And if we move to a very short TF like 4 hours we see a nice H&S formation that is about to be formed.

So far so good but to see that going lower we have some supports too. We have a basic support lines (in green) which is exactly one year old and another one from NOV last year. Plus we have the lower band of the wedge acting as a support line.

But as you can expect there are a lot SLs             around that blue dotted line and after that is just FREE MONEY until the next level of support as nothing can stop that from falling.

But you may ask KHAN why do you think this pair can break all layers of supports apparat from a few times of false breakouts and failures?

Well get ready for the main ones that coming next…

B) British Pound currency outlook

This is the weighted average GBP all the way from Brexit.

The pair has been rising up since flash crash for almost 20 months and made that blue wedge and just recently made H&S at the top of the wedge followed by a sharp move lower. As you know I made 370 pips on GU for that move lower and see where the price is right now. Let me zoom in

As you can see the price made a wedge formation at the lower band of the Blue wedge and both EMAs (14 and 21) and Neckline acted as a strong resistance. If there is a move lower the first target is Fibo overlaps (red circle) and then maybe lower as the above chart suggests.
And if I go to 4 hours TF you will see a beautiful rejection of 1) rising trend line and 2) EMAs. But again you might ask how do you know that the last layer of rising support can be broken? Then in the case see the following.

This is UK 10 years Yields and see how it pulled back nicely after Friday’s session. The weaker a country’s economy is the lower the Yields going to be allocated to bonds. So this one suggest a weaker British Pound.

ht            

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