Hello traders! Yet again we are back to the toping of the GBP weakness overall, and this time we’ll observe GBP/NZD currency pair. Clearly, there is a long term downtrend going on, and there are no signs that it has ended or about to end. Let’s try to understand how far down the GBP/NZD exchange rate might get.
On the 30-minute chart, there is lower lows and lower high pattern overall. Today GBP/NZD has reached and rejected previous level of support area near 1.9600 psychological resistance. It has been rejected, after which price went down and broke below the uptrend trendline, suggesting further price weakness.
Price corrected up and cleanly bounced off the 61.8% Fibonacci retracement level at 1.9542. It makes this price now a key resistance and as long as GBP/NZD remains below, the downtrend will remain valid.
The nearest downside target is seen at 127.2% Fibonacci retracement level, applied to the most recent retracement towards 1.9600 area. It is pointed out to the 1.9328 level, which also corresponds to the middle trendline of the descending channel formed previously.
Bias: Strongly bearish while below 1.9600
Potential Resistance Zone: 1.9540 – 1.9560
Potential Targets: 1.9328
Have a profitable trading!