GBP/NZD moved up since April 21 without facing any significant resistance. Finally, the price topped the level of 1.1482 on May 21 followed by a large sell-off.
After testing the top level, the pair
found the resistance area around 2.1260 (R1), which is currently being
rejected again. Applying the fibonaccy retracement to a low of 2.0562 (the last poit where uptrend trendline has been rejected) made on May 8 and a high of 2.1482 established back on May 21, it can be seen that 23.6% Fibonaccy support ( R1) has
been penetraded and is currently acting as a resistance that has been already mentioned. At the same time, the H4 candle closed below 38.2% retracement level (S1)
and the DeMarker oscillator formed a berish divergence.
Everything poinys to a
potental reversal of the trend where GBP/NZD should start moving lower. Consider
selling GBP/NZD near R1 (2.1263) targeting previously tested area as support
and resistance, which is 76.4% Fibonacci retraccement at 2.0778. A break
above R2 (2.1482) will favor bulls. However, this seems to be unlikely scenario.
Support: 2.1129, 2.1022,
Resistance: 2.1263, 2.1482
The material has been provided by InstaForex Company – www.instaforex.com