23 Sep GBP NZD Back On Watch List For Possible Swing Long
GBP:NZD was a potential swing long candidate a couple of Months back and although it rebounded from my “line in the sand” support, it sliced through some quite strong supports on it’s journey there so I gave it a miss.
One of those failed “supports” was in the 1.9510 area and you can see from the chart below that it failed to provide support in July and again in August. Most people would then go on to dismiss that level as support in the future but in such instances I tend to keep the horizontal lines in case I can learn something from them in the future.
On the Daily chart price now appears to be attempting to gain traction at that same “support” level, and adding to the technical case is a clear positive MACD divergence created from the previous 2 swing lows as can be seen in this Daily chart:
The Weekly chart shows how price reversed from that aforementioned “line in the sand” in the form of this falling wedge back test defined by the red circle:
On that Weekly chart price is clearly underneath all of the major moving averages, but I very much like the long term positive MACD divergence that has formed over the last 2 Years.
It’s too early to say if anything will come out of this potential swing long set-up as there isn’t quite enough bullish evidence to jump into a trade just yet.
But, if bulls are going to start buying GBP against the NZD, now is the time where they collectively have a chance to make something of it.
I’ll be watching this pair over the coming days, particularly on the 4 hourly time frame for early clues to potential future strength. An ultimate target for any long positions would be 2.0984 level as defined by the resistance line you can see in the Daily chart above, however, it’s a little too early to start setting sights on a rally that will take us there, just something to bear in mind.
If a long position is entered on this pair, I’ll post the entry details in the comments section below.