In some recent commentary on the GBPNZD we discussed the possibilities of a bullish price action signal forming as the market retested an old resistance level and held a new support. When the market tested the level last week, it prompted strong buying activity and prices exploded higher. The daily candle’s close price was much higher than the open price, a very strong feature for this bullish signal.
GBPNZD is recovering from a large bearish trend that drove prices lower in the last few months. The bears eventually burning out, the momentum died, and the market consolidated. Now the chart has broken into new highs and created a higher low, communicating the signs of a new bullish trend forming. If we can strategically position in long here, then our chances for a high return trade are greatly increased as we ‘buy at the bottom’.
Because the candle range is so large, I am hoping to take advantage of a retracements entry next week to utilize a better entry price for a long position.