Trade Of The Day: GBPNZD To Test Channel Resistance
Trade Of The Day: GBP opens this morning weaker on the back of dovish speech by BoE Governor Mark Carney who pushed back the timetable for a rate hike. A series of better-than-expected data including CPI figures was not enough to support the sterling. Carney added that he would need to see significant improvement in wage growth, core inflation and economic growth before considering a rate hike, pushing rate hike expectations until the second half of 2017. New Zealand dollar reacted negatively to the Chinese GDP data coming in just shy of expectations. New Zealand’s Q4 CPI surprisingly fell by 0.5% QoQ, mainly as a result of falling food and petrol prices. Coupled with another fall in dairy prices recorded overnight.
Technical: While 2.2000 supports downside reactions expect grind higher to test 2.2727 symmetry projection and descending trendline resistance
Trade Idea: I am monitoring GBPNZD looking for price to test confluent resistance at the 2.2727 level where we have a symmetry pattern in both price and time developing in the same way the last correction occurred we also have the intersection of descending trend line resistance. I will be monitoring intraday reversal patterns at this level to set shorts target a break lower to test base support at 2.0700 as per the chart below
For updates on trade of the day set ups and the other trades I am currently monitoring be sure to follow me on Twitter @LFXPatrick