GBP/NZD stopped its latest downswing at a key support level!
Will this lead to the pair extending its weeks-long uptrend?
Let’s take a closer look at the 4-hour chart!
GBP/NZD 4-hour Forex Chart by TradingView
A generally anti-USD sentiment from the previous week worked well for the New Zealand dollar, which saw big gains against its major counterparts. The British pound, on the other hand, showed spotty performances with not a lot of top-tier data releases printed from the U.K.
Let’s see if this week’s potential catalysts can extend last week’s price action or encourage a technical reversal.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the New Zealand dollar and the British pound, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
GBP/NZD, which has been making higher highs and higher lows since hitting a bottom at 2.0400 in late February, found resistance around the 2.1174 zone. It dipped back to the 2.0950 handle, which is conveniently just above the S1 (2.0910) Pivot Point line and the 100 SMA in the 4-hour time frame.
Can GBP/NZD extend its uptrend?
Convincing bullish candlesticks above the 100 SMA opens the pair to a move back to its 2.1170 previous highs if not the R2 (2.1220) Pivot Point area.
But if this week’s market themes encourage more GBP selling, then we could see GBP/NZD break below its 2.0900 – 2.0950 previous support. The pair could drop all the way down to 2.0700 before we see sustained buying.
What do you think? Can GBP/NZD extend its uptrend in the next couple of days?