GBPNZD Intraday Strategy
Since the Bank if England (BOE) released its monetary policy and inflation reports on 5 November, 2015, GBPNZD was able to post a modest recovery in the Forex market. The price has met a crucial resistance level, which we will elaborate on shortly.
GBPNZD 4hr Chart
Please click on the chart to enlarge:
The resistance at 2.3382 is critical for as a firm close above on the daily chart may suggest stronger gains are due or GBPNZD. At the time of this writing we can note the resistance was able to contain the gains. GBPNZD is trading within a bullish channel as highlighted on the 4hr chart via the black lines.
For the intraday strategy we have used Moving Averages (MA’s) that may be used for traditional breakout strategies. The 21MA (in purple) was able to sustain the price as it was successfully tested on multiple occasions. A break below the 21MA will expose the lower support line (in black) where dip-buying strategies may be exercised upon a successful retest. Only a break below the 55MA (in pink) may suggest further weakness is due, targeting the 100MA (in blue),
The retail sales from New Zealand will be published ahead of the opening of the Forex market, which may suggest a gap will be seen in accordance to the released figure. A figure above the expectations may GBPNZD lower, which could provide a long entry if the lower support line is successfully tested. A figure below the expectations may send GBPNZD higher. Although some traders may consider a short trade if the resistance (2.3382) is tested we prefer adopting a more conservative approach and focus on the MA’s and GBPNZD bullish channel. If GBPNZD is able to close above 2.3382 this intraday strategy will be invalidated and may be updated in accordance to the technical patterns that may emerge from the breakout should it occur.