Hello traders! Let’s have a look at GBP/NZD pair on the 2h timeframe.
First off, we can see the rejection of the downtrend trendline. Secondly, today pair produced a very clean bounce off the 61.8% Fibonacci retracement level, which is at 2.0434. After that, a strong bearish candle followed and this is the point where we stand right now.
Currently, price is below the 200 Exponential Moving Average and the downtrend trendline. This increases the probability of a downtrend. The first target is seen at 1.9922, which is 161.8% Fibonacci applied to the corrective wave up after 200 EMA breakout. This price level also corresponds to the previous bottom, which means that GBP/NZD could be aiming to form a double bottom at that price area.
However, if this support is broken, the downtrend could get accelerated by more selling power. In this case, the decline would be substantial. But for now, there is a short term decline is expected, and we are yet to see whether the strong downtrend will be the case.
Bias: Strongly bearish while below 2.0435
Potential Resistance Zone: 2.0290 – 2.0300
Potential Targets: 1.9922
Have a profitable trading!